Quote:
Originally Posted by Beemnseven
You and your economics buddies are a little off. You're forgetting one of the most basic fundamentals of economics -- supply and demand. The cost of marijuana today is reflected in its illegal status. Remove the Black Market implications and the price goes down. I don't need econ professors for that; it's common sense.
And why do you assume people will go out and buy imported marijuana when they can easily grow it on their own? Is it your contention that the sun doesn't shine in the Northern Hemisphere enough to adequately address the demand for the marijuana?
If you're as versed in economics as you say, you of all people should realize that consumers will seek out the least expensive route for the products they want. That's where competition comes in. If Big Business decides to enter into this market, they're going to have to compete with the people who just as easily grow it in their living room. In fact, I would submit that not as many "Big Business" entities would even bother to compete when the cards are stacked against them like that.
Even in your scenario, clearing fields, putting up massive capital amounts to
devote to new products; any weakening of the dollar could be negated once all of the resources relegated to law enforcement, source interdiction operations, court costs, Coast Guard-border enforcement and customs enforcement are removed since it's no longer illegal to consume or possess.
Since you've already admitted to throwing logic and reason out the window with this issue, I suppose it's pointless to argue further. As long as the pharmecutical companies have a stranglehold on the politicians, the GDP and the strength of your dollar will be safe.
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What a dismal understanding of supply and demand you have.
Yes, marijuana is priced the way it is because it's illegal. The fact that it has to be smuggled keeps the supply in check, consequently price stays high. You drop the prohibition, suddenly it will arrive in the states via vast shipments from south America. Likewise, we'd be able to grow our own in mass quantities. The price will come down because the market will be flooded with weed.
The guy growing his own in his garage is no competition for big business. That's like saying Anheuser-Busch and Miller have to compete with guys who brew their own beer at home, it's just asinine.
If legalized, it would be American companies like Phillip Morris trying to grow it here in the states competing against Columbian growers who have much lower labor costs, lower costs of land, and require no new capital investment. The high supply of weed in the market, and increased competition between companies like Phillip Morris and overseas growers will push the price WAAAY down. Competition will push the price down so far that South American growers will be able to drop their prices below the point at which Phillip Morris could cover their costs. The South Americans would still turn a profit even on their lower margins, simply because the costs are so much lower. Phillip Morris's margin would be so bad they'd be forced out.
The affect on our currency in the global market would not be anywhere close to being offset by savings on law enforcement and all that crap. The government wouldn't cut back costs on law enforcement, they'd just redirect their attention to other issues. The government doesn't have competition like business does; there's no incentive for them to cut police officers or border control agents.
Where the eff did you go to business school?