In the new book, Marijuana Legalization What Everyone Needs to Know – operations research(!) and public policy professors from CMU, Pepperdine, and UCLA – attempt to determine what the price of marijuana if production was legalized. Using Canada’s industrial hemp industry as a guide, they estimate a price of about $5 per pound for mid-grade ganja, and a price of about $20 for good stuff. That’s 800 joints for a quarter. (But then again, who smokes joints when you can smoke a bowl?) As Matt Yglesias points out, this puts in the ketchup and sugar packet territory.
Of course, I don’t believe that the price would ever actually go that low. First, cannabis would taxed quite aggressively. Sin taxes and all that. Also there’s such a huge disconnect between the potential $3 per ounce price and the $300 per ounce price that consumers are conditioned to expect. While prices will no doubt fall, I wonder to what the profit margin would end up being? 10x? 50x?