A reader writes:
I need find out where Keith Humphreys is getting his pot.
Given the condescension and snark he directs at people who might dare to question his numerical analysis, I find it amusing that in his post of "data, nuance, the encouragement of independent thinking and a lot of other stuff [ideological marijuana legalization advocates] will find upsetting", he pulls out of the air a number which (a) appears to come from nowhere, lacking a citation or any supporting data, and (b) would in fact make any pot smoker I've ever spent time with VERY HAPPY.
$120 AN OUNCE? Did he last buy pot in 1980?
In NYC I pay $150 for a bag containing slightly less than 1/4 of an ounce (that is, $600 an ounce, or 5x). It's high grade and delivered to my door, and of course it's NYC, but $120 per OUNCE? Hell no, Keith. While I haven't conducted a scientific survey, I have some experience, having been around in New York, and having bought from states in New England, the South, and the West. The consensus I come to is that $300 is a tremendously good price for an ounce of retail-level marijuana (and 1/2 of what I pay).
Another reader piles on:
How much is Kevin Humphreys smoking to estimate the national average of an ounce of weed to be $120? I'm no expert, but I do buy a lot of pot and that number sounds suspect. So I checked out the site priceofweed.com. For Virginia it lists the average price per ounce of low quality pot at $217. The average for high quality? $447. Here in southwest VA I pay $60 for an eight ounce and about $400 for an ounce for high quality bud. (The discrepancy between the two is because of the volume discount.) So if Humphreys is going to use the upper estimate of the value of marijuana as a commodity he should also use the upper estimate for the price of an ounce of marijuana
Another:
I have some knowledge as to what pot ought to cost on a typical basis as my wife treats her fibromyalgia and irritable bowel syndrome with it. Until recently, we lived in a state without a medical marijuana law and therefore had to obtain marijuana illegally, just like most of the rest of the county.
I have never encountered decent quality marijuana for less than $200/ounce in the western US, and more often it is closer to $250-300/ounce. There is some price fluctuation based on the time of year relative to when big outdoor harvests have taken place and supply is highest (usually in the middle of fall around October). That's if you want to go black market. Where I live, medical dispensaries charge anywhere from $50-$65 for 1/8 ounce of marijuana, depending on the strain, which means the per-ounce price goes up to $400-500. If we re-adjust for those numbers, assuming a relatively low average of $240/ounce (double what Humphreys assumes), we come up with a half-billion ounces to meet the same $120 billion figure, leaving us with a more manageable per-capita consumption rate for the US of about 1.62 ounces per person, per year.
Furthermore, medical patients often use about an ounce a month, assuming one 1 gram joint per day (or potentially more, depending on the method of administration and condition being treated), and consistent recreational users probably go through an ounce in two to three months, on the low side. As you can see, the $120 billion figure isn't that exaggerated once you actually determine what it is that people pay. No matter what, that's a lot of untaxed dollars being made off of a virtually harmless plant.
Humphreys responds to these sorts of criticisms in the comments of his post:
Many people have commented about the ounce price saying it doesn’t match their personal experience. This brings up an important analytic point, which is that no one can tell what the average ounce price is nationally based on their personal experience, which is why policy analysts use national data. If your local experience is different than national data, it means that your local experience is different than national data.
Just north of the Mexican border, you can buy commercial grade (4-6% THC) marijuana for $200-$500 per *pound*. The price for the very same marijuana is triple that in the Northeast. Sensimilla costs much more than run of the mill marijuana all over the country (double or triple the national average price), but it’s a small part of the market so if that’s what you buy you get a distorted sense of average prices nationally. Most people don’t realize that marijuana is overwhelming smoked by lower income people (That’s obvious if you count days of use, people miss it because they often just count users) and there is a whole market of lower-grade, lower cost cannabis (e.g., $70/ounce) that supplies it. The sense of average prices of middle class people (not to mention the subset of Americans who read drug policy analyses on the Internet) thus tends to be way higher than national average prices.
More than a year ago, CNBC looked at the various estimates and concluded that a legal cannabis industry would probably we valued between $35 and $45 billion:
Assuming comparable taxes to tobacco of 40-50% (excise and sales tax), a $40 billion marijuana market would yield $16-20 billion in taxes.
The Dish 