Marijuana Monster Money: California Makes More from Cannabis Than the Next 5 Largest Crops Combined

Marijuana Monster Money: California Makes More from Cannabis Than the Next 5 Largest Crops Combined

So as a heads up to anyone who isn't yet aware (most likely no one) California just legalized pot this past election. CA is also the sixth largest economy in the world. So this should prep you for the info that I'm about to lay down.

According to report last week from the Orange County Register, California's marijuana crop is not only the most valuable agricultural product in the nation's number one agricultural producer state, it totally blows away the competition.

Using cash farm receipt data from the state Department of Food and Agriculture for ag crops and its own estimate of in-state pot production (see discussion below), the Register pegs the value of California's marijuana crop at more than the top five leading agricultural commodities combined.

Here's how it breaks down, in billions of dollars:

Marijuana—$23.3
Milk—$6.28
Almonds—$5.33
Grapes—$4.95
Cattle, calves—$3.39
Lettuce—$2.25

I bolded some things of note in that. That's pretty impressive, BUT there is a caveat. This number is an estimate based on police seizures while the plant has been illegal.

The newspaper extrapolated from seizures of pot plants, which have averaged more than two million a year in the state for the past five years, and, citing the UN Office on Drugs and Crime, used the common heuristic that seizures account for only 10 percent to 20 percent of drugs produced. That led it to an estimate of 13.2 million plants grown in the state in 2015 (with 2.6 million destroyed), based on the high-end 20 percent figure.

It then assumed that each plant would produce one pound of pot at a market price of $1,765 a pound. Outdoor plans(sic) can produce much more than a pound, but indoor plants may only produce a few ounces, so the one-pound average figure is safely conservative.

The $1,765 per pound farm gate price is probably optimistic, though, especially for outdoor grown marijuana, which fetches a lower price than indoor, and especially for large producers moving multi-dozen or—hundred pound loads

And maybe law enforcement in California is damned good at sniffing out pot crops and seizes a higher proportion of the crop than the rule of thumb would suggest. Still, even if the cops seized 40 percent of the crop and farmers only got $1,000 a pound, the crop would still be valued at $8 billion and still be at the top of the farm revenue heap.

So I'll leave it up to your personal opinion on how reliable you find these figures and estimates, but one thing is for certain the legal weed market in CA is literally about to change the face of pot economics.

So let's talk about jobs. Now a big part of the Trump campaign is job creation and a return of manufacturing jobs. Well I don't know about you but I see a gold mine bursting at the seams just crying out to be tapped. Wouldn't it be prudent for the Trump admin to get behind this wave instead of trying to slow it down with AG picks like Jeff Sessions? But Trump is mum on it so far.

Also, in other news: Marijuana supporters are going to hand out 4200 free joints to people at Trump's inauguration to be sparked up 4 minutes and 20 seconds into the speech.

is your grass really blue?

and this is why weed is REALLY dangerous.

Anyone can get out of poverty and even get rich growing it.
and the TPTB cant have that now can they?

originally posted by: dashen
is your grass really blue?

Try going to a bluegrass concert and taking a big whiff of the air and you tell me.

and this is why weed is REALLY dangerous.

Anyone can get out of poverty and even get rich growing it.
and the TPTB cant have that now can they?

I think it's more to do with a few key industries that are already rich not wanting to lose profit share, but I think we have similar ideas here.

Yes, and it will be so overly regulated that only the major corporations with their patented versions will be allowed to sell.

It will also be used as a back-door method of gun confiscation.

Also, for future use, it will provide for a new registry of people for surveillance and/or imprisonment.

I'm of the mindset, the cultivation should not be regulated, while sale/distribution taxed.

California has yet to announce the requirements or costs for permits.

We are going from a selective policy administration, who would only raid highly successful dispensaries in legalized states, to an assumed stricter (AG pick) administration that may utilize the very tools California creates in regulating a plant for mass arrests.

a reply to: GodEmperor

Wow! That's quite a lot of predictions you just made there. Which is made all the more odd because the micro-brewery market for beers proves your predictions completely wrong. If the alcohol market isn't so tightly regulated that we can't brew our own beers at a profit then it reasons that the pot market will never be so regulated that we can't grow our own pot at a profit.

In any case. Despite your negativity, whatever we move to will be THOUSANDS of times better than what we have now.

We are going from a selective policy administration, who would only raid highly successful dispensaries in legalized states, to an assumed stricter (AG pick) administration that may utilize the very tools California creates in regulating a plant for mass arrests.

This is a fear I have, BUT I also feel that if something like this happens the public backlash will cause them to back down. I also reckon that states like California can choose to actively not support the federal government's attempts to arrest pot growers.

a reply to: Krazysh0t

What are they doing about hemp? I think medical marijuana, hemp fibers, and the various oils should be the next areas to focus on. Don't get me wrong, I know a lot most people want mj for the recreational uses. But I'd love to see some hardcore research being done on the industrial and medical uses.

Why grow food or raise dairy animals when you can grow pot and be rich.

Except the country still needs the food....

Also, doesn't growing marijuana take a LOT of water? How's that going to work for drought plagued Cali?

That's a lot of money, but nothing will help the California economy because of the ridiculous amounts of spending they do any their inability to pass a budget. It's poised to be the next Detroit.


Generally, state officials and the media depict that “wall” as $26.2 billion, far smaller than it actually is. California's actual wall of debt is $443 billion. The state's complete and growing Wall of Debt reflects unsustainable budgeting practices.

uscommonsense.org...

a reply to: enlightenedservant

Hemp is like that sibling of a famous pop star sitting in recreational weed's coattails. It can't get the limelight it deserves because it is outshined by its more popular kin. There are a lot of great reasons to get behind it though and I certainly support it.

originally posted by: jjkenobi
Why grow food or raise dairy animals when you can grow pot and be rich.

Except the country still needs the food....

I could have sworn I mentioned employing the unemployed. Last I checked the unemployed aren't growing ANYTHING food, dairy, pot or otherwise. Also you do know that we produce so much food in this country that the government LITERALLY pays farmers not to grow more of it right? Do you not know what a farm subsidy is?

Also, doesn't growing marijuana take a LOT of water? How's that going to work for drought plagued Cali?

Clearly just fine since this market is the estimated illegal market that already exists about to go legit.

originally posted by: avgguy
That's a lot of money, but nothing will help the California economy because of the ridiculous amounts of spending they do any their inability to pass a budget. It's poised to be the next Detroit

Generally, state officials and the media depict that “wall” as $26.2 billion, far smaller than it actually is. California's actual wall of debt is $443 billion. The state's complete and growing Wall of Debt reflects unsustainable budgeting practices.

uscommonsense.org...

People have been saying this for a few years now yet CA is now the sixth largest economy in the world. At some point MAYBE you should admit there is more going on then JUST this wall of debt driving CA's economy.

a reply to: Krazysh0t

Most of the current value of a pot crop, is associated with the cost of doing business under the radar. While some small scale producers do what they do for the love of the craft, keeping costs down all across the board, many of those who produce it as a salable commodity, work in the potential cost of legal defense, securing the site, and distribution and the risks people take to make the supply chain work, into the pricing for their product.

There is a good chance that legalisation would reduce the cost of the product, because it would no longer carry the risks associated with its production, transportation, or retail to the consumer. So its value on the open market would probably reduce somewhat initially. That being said, once it becomes a legally marketable product, there are no doubt many people in most states, who have a plan for how to make the growth and sale of weed into a viable business. Many of these will be cottage industry types, growing specialty strains by hand with minimal involvement of artificial additives and so on.

By the time the supply chain expands to cope with the demand that legal weed will no doubt bring, the cost will start to rise again, although if there is a tax attached to the sale of any significant scale, the chances are that producers will try to keep their share of the product cost low, so as to attract consumers to their brands and strains. Its an interesting time for those living in the United States!

a reply to: TrueBrit

Yep. That's the good old big three drivers of economics at work: supply, demand, and price. This is like ground floor level for economists who want to better study and understand developing markets. Also switching between an illegal to a legal market isn't done often in world so I'm sure many want to see how it plays out in real time.

I'm a little skeptical that unemployed Cali's are suddenly going to become successful small business owners.

I'm more inclined to believe existing farmers/vineyards with land and resources will just start switching out their low return crops for the new cash crop.

The people who still grow a plant or two in their urban HUD home aren't going to change.

a reply to: jjkenobi

Well I don't believe it either because I'm under the belief that the economy cannot grow like the Trump admin wants it to grow, but the gameplan is to make more jobs and this is a GREAT way to do so. Do you not agree? Or are these jobs not acceptable for some reason?

a reply to: jjkenobi

They might not be successful small business owners, but a good amount of them might become integral parts of successful small businesses, which would be great for the jobs numbers as well as revenue from income tax and sales tax too. And with regard to small growers in urban settings, these individuals will be able to grow their crops out in the open. If they have a garden, they will be able to use it, rather than the modified, climate controlled wardrobe in the basement, to grow their crops, again, promoting the possibility of creating small scale cottage industries.

a reply to: jjkenobi

Now that weeds legal I'm investing in a funyun farm.

a reply to: Krazysh0t
Switching from an illegal market to a legal one you have a prime example in US history. Just look at prohibition. I live in the UK and suffer from chronic pain and I would dearly love our government to legalize marijuana for me to try. At the moment I have not tried it as I have no access to a true product as illegal suppliers are known for not supplying the correct stuff. Besides it's illegal here.

a reply to: crayzeed

True true. But the science of economics was much younger back in those days. I'm sure economists of our era would like more recent real time data to analyze.

I thought legalized pot was about medical issues like pain. Hard to imagine this isn't more about recreation than medical.
Not that I care but...