Legalizing Won’t “Reduce the Market” AT ALL

The following is my response to the Doomsayers and RCMP spin-doctors within the “California Referendum Could Deal Devastating Blow to BC’s Lucrative Marijuana Export Industry” story – found here:

Contrary to what the RCMP want you to believe, legalizing cannabis will in fact increase the size of the market while at the same time reducing the price for SOME but NOT ALL kinds of cannabis.

The RCMP are not factoring in the probability of cannabis replacing 10-50% of all pharmaceutical drugs.

“Dr. Raphael Mechoulam, NORML, High Times and Omni magazine (September 1982) all indicate that, if marijuana were legal it would immediately replace 10-20% of all pharmaceutical prescription medicines (based on research through 1976). And probably, Mechoulam estimates, 40-50% of all medicines, including patent medicines, could contain some extract from the cannabis plant when fully researched.”

For a better understanding of the scope of the market:

Chronic Conditions Treated With Cannabis
Encountered Between 1990-2004

Let’s estimate just how big the North American pharmaceutical market is, and then find out just how much “10 to 50%” of that would be…

“IMS Health reported today that the size of the global market for pharmaceuticals is expected to grow nearly $300 billion over the next five years, reaching $1.1 trillion in 2014. … Global pharmaceutical sales growth of 4 – 6 percent is expected this year, consistent with IMS’s prior forecast. In 2009, the market grew 7.0 percent to $837 billion, compared with a 4.8 percent growth rate in 2008.”…-a0224447014

This source provided figures of over 300 billion dollars for the North American pharmaceutical market – and that was back in 2007!:…/GlobalSalesbyRegion.pdf

So …. 10 to 50% of 300 billion is 30 to 150 BILLION dollars. Remember … that 30 to 150 billion isn’t the size of the pot industry post legalization, it’s the size of the GROWTH of the pot industry post legalization (excluding the export market, which would also probably be substantial). The pot industry is already in the tens of billions, and relegalization is only going to make it bigger.

So what if the price for cheap weed goes down to ten bucks an ounce? Cheap weed has always been around. It’s the expensive stuff that will retain it’s value – right now the difference between average coffee and expensive coffee is a factor of 44 to 60:

“In 2005, however, the coffee prices rose (with the above-mentioned ICO Composite Index monthly averages between 78.79 (September) and 101.44 (March) US Cent per lb).”

“If you would like to purchase certified genuine Jamaica Blue Mountain® coffee now from $44.99 per pound (compare in excess of $60 pound in stores, if it can be found) please click here.”

So if cheap cannabis is 10 bucks an ounce and the average price is 30 bucks per ounce then (if the coffee market is any indication) 45 time 30 is 1350 per ounce, and 60 times 30 is 1800 per ounce – for the best cannabis in the world.

I tend to believe what Marc Emery believes – that “the provincial economy could benefit from industry innovation focused on developing high-quality cannabis strains” … the real money will be in the breeding and the selling of high quality seeds. Growing cannabis will either be about large operations and hash production or “boutique” cannabis grown in greenhouses.

But the market is going to get bigger, not smaller. We activists should make more of an effort to point that out to reporters, or people will have the wrong idea about what relegalization will look like.

David Malmo-Levine