Drug Law

Huge, Legal Marijuana Farm Study Surprises Industry, Officials

| by NORML

The groundbreaking study showing how the City of Oakland could make $2 million per year licensing a medical cannabis growing warehouse caught many locals by surprise this week. Even though city officials and the cannabis industry are looking toward licensing large-scale grows allowed under state law SB 420, the hard numbers appear to be the first of their kind. Economist Joanne Brion of Brion and Associates, who did the six-month, $16,000 report said she was surprised at how potent an economic force cannabis is.

Brion’s report found that licensing a seven-acre cannabis growing facility near I-880 at the Embarcadero would create up to 371 union jobs, paying an average salary of $53,700 a year. The site could produce an average of 58 pounds of cannabis per day, and generate gross revenues of around $59 million per year. The site would grow an estimated quarter of one percent of the estimated 8.6 million pounds of cannabis cultivated annually in California.

Nailing down yield rates for plants became a challenge, but after talking with growers, she concluded the best way to measure yields is “quantity per light.” Once she had a good quantity-per-light metric and knew the amount of lights the facility could support, she determined the site could produce an average of 58 pounds per day.

Brion estimates the average wholesale price per pound of medical grade cannabis at $2,800. The city could tax it anywhere from the current retail tax rate of 1.8 percent to up to five percent in her analysis, generating anywhere from $1.1 million to $2.9 million in taxes off gross annual revenues. It would be among the most labor-intensive work in the Bay Area, she said.

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Licensing large-scale grows would be a win-win-win, Wilcox said. Such grows would increase public safety, increase medicine quality, and raise funds and create jobs for the city.

Growers often steal power from the electrical grid with dangerous wiring schemes that have burned down residences. Robbers routinely target the lightly guarded plants and money of indoor pot farms. Both issues could be mitigated by a regularly inspected facility with up to thirty security personnel, cameras, and gates. In addition, multiple similar facilities could drive down local pot’s cost, increase its quality, and put dangerous, local home growers out of business. Long-term, a fully licensed supply of cannabis in California could curb the environmental destruction from cartels growing in national forests, and render home-growing a quaint hobby, on par with growing seasonal vegetables.

via Huge, Legal Cannabis Farm Study Surprises Industry, Officials | Legalization Nation | East Bay Express.

Over three hundred fifty jobs with average salaries about $50,000?  One to three million dollars in tax revenues?  Can you think of any other industries that would cause a city to think twice about welcoming with numbers like these?  (Maybe BP drilling for oil off their coast, though I doubt that would create 371 good paying local jobs.)  And this is just to supply medical users; multiply times ten when California re-legalizes for all cannabis consumers!

The only fear I have from this article is the implication that home growers would be “out of business”.  Even with big warehouse marijuana, there will still be a market for niche varieties of cannabis strains, hand grown and trimmed buds, and personal service.  I hope it becomes a “quaint hobby”, but even hobbyist tomato farmers are allowed to sell their crops at market or directly to others.  So long as that right to home grow is protected I am looking forward to legal marijuana warehouse grows.

What would end, though, are folks supplementing their income by charging consumers “what the market will bear” for cannabis based on an undefinable “prohibition risk” that more often means a consumer suffering the risk than the producer.  89% of all marijuana arrests are for possession, not for growing and sales.  A grower opposing legalization because it affects his job prospects is as guilty of oppressing cannabis consumers as the prison guard who opposes legalization for the same reason.