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(Slate)   Turns out that selling marijuana in Colorado isn't quite the profitable business everyone assumed it would be   ( divider line
    More: Obvious, Colorado, traders  
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5166 clicks; posted to Business » on 17 Jan 2014 at 11:52 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»

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2014-01-17 11:22:33 AM  
5 votes:

sigdiamond2000: So they interviewed a pot shop owner who is a really terrible grower and businessman and a black market dealer who is threatened by the prospect of legal weed, and came to the conclusion that it won't be a profitable business in Colorado.

Well done, Slate.

Not only that, but it's been legal for a little over two weeks. Two weeks! I think that maybe, just maybe, we can wait a little bit while this fledgling industry figures out product, marketing, distribution and management before we make any sweeping predictions. Here, I'll make my predictions for the first week of 2015, when the "Marijuana's been legal for a year now--what has changed?" articles crop up:

- Most companies made enough to stay in business, but haven't been reactive enough to stay highly profitable as the industry changes like legislative adjustments have occurred. Several companies have gone bust. A few, however, have adjusted faster than most, either with better product, better distribution, better marketing, and/or better management.

- There will have been a few high-profile cases of marijuana ending up in the hands of people that shouldn't have it. Every time a driver is pulled over and busted for DUI-weed, some people will blame the availability of it because of the emerging pot shop industry. Others will then point out that the number of these cases will be statistically level with the traditional incidence of people busted while driving under the influence of weed. Any unusual trend in Colorado that can possibly be tied to marijuana will lead to headlines like: "Unemployment Climbs 1.5% in Northern Colorado. Is Legal Marijuana Suppressing Job Seeker's Motivation?" which will contain exactly one quote from some crackpot who points out that long-term marijuana use has a correlation with decreased motivation.

- 4/20 will be a huge event in 2014, nearly double the size of previous years. Funyuns sales skyrocket, Frito-Lay files impressive first-quarter earnings 5% above analyst expectations.

- Every single news story from Colorado about some idiot being an idiot will either include information about, or speculate on, whether the person had smoked pot prior to whatever he's being arrested for, or was found to be in possession of pot when arrested.

- Nothing will really be that different. People that always smoked pot will continue to do so, people that never smoked pot probably won't bother, and about 1% of people that were on the fence about whether or not to try it will be swayed by its legality.
2014-01-17 10:53:55 AM  
3 votes:
Well the risk is lower so it would stand to reason the rewards would lessen as well.

Also something about the free market and lowering prices. The free market?! HOW DOES THAT WORK?!
2014-01-17 03:29:52 PM  
2 votes:
This is one of the stupidest articles I've seen in Slate, it's even bad for post-Washington Post takeover Slate which is notably dumber and more right-wing than old Slate (which I used to read daily).

The "best" part was probably the discussion of the "benefits" of an illegal dealer. CT says: "A lot of people would rather go to their drug dealers' house and buy a bag and sit down and smoke a bowl with them than go to a store."  Really? Because that's EXACTLY the sort of thing I farking hated about dealers. I don't want to smoke my weed with you that I just bought from you, I want to get it and leave and smoke with my real friends. Not my "better smoke with the dealer so he keeps selling to me" asshole fake friends. Another gem: "There are a lot of things that go down at these dispensaries and grow facilities that nobody really knows about. My clients know where my product is coming from. They can ask me anything about it."  Really? He must be either a great liar or a very exceptional dealer, because every dealer I've had has had at most 2 strains on hand, and usually can't tell me anything about them. Best I ever had was a guy who told me where it was grown. Those dispensaries tend to have many strains on hand, and I've heard they can tell you all about them. And now for the final, finishing quote from CT: "Who wants to wait 30 minutes in line to score a bag?" Now he's just trolling. I've never had a dealer that was prompt and easy to get ahold of when I wanted. I would gladly wait 30 minutes in line to get a bag of exactly what I wanted, when I wanted rather than having to wait until the dealer is ready, wait for him to show up (late), and then have to smoke with him before he finally leaves.

Seriously, the guy is full of shiat. I would gladly pay 2x illegal prices for the convenience of good service, done quickly, without the crap. I'd gladly wait in line for it. He's either going to start delivering blowjobs with the weed or he's going to go out of business sooner than he realizes. Just my prediction.
2014-01-17 12:19:42 PM  
2 votes:
So a start-up business that has to invest a bunch of cash up-front to build up infrastructure and inventory, meet licensing and regulatory requirements, and experiment a bit to find a stable and reliable business/production model is going to have high initial costs and may not be insanely profitable from day 1? And clandestine, illegal operations who provide the same product but do not have to deal with any of the regulatory hassle or overhead costs (but run the risk of being arrested and prosecuted) have higher profit margins? Shocking revelations, Slate! I'm clearly better off trying to illegally grow a bunch of pot in my basement and then sell it at the local elementary school. Thanks for the great business advice!
2014-01-17 12:01:28 PM  
2 votes:
That's odd... My boss at this time last year went and saw his family for Xmas. When he got back, he reported that his sister and her husband were now pot growers as part of a co-op. He had been an architect that usually only worked on mansions, and she had been some kind of high end corporate lawyer. Both had quit their jobs and were make more money as legal pot growers than their previously lucrative professions, I wouldn't expect the sellers to be much more regulated and stifled than the growers...
2014-01-17 11:03:51 AM  
2 votes:
So they interviewed a pot shop owner who is a really terrible grower and businessman and a black market dealer who is threatened by the prospect of legal weed, and came to the conclusion that it won't be a profitable business in Colorado.

Well done, Slate.

What does the American Family Association think? And what about the author's grandmother?
2014-01-17 04:27:34 PM  
1 vote:
Meh, I'm pretty sure that one place just opened up for recreational today with $25 8ths. The prices are going to plummet as more of the stores open up and are able to get their recreational grows up and running. The ones open now were only allowed to transfer 15% of their medical stocks to recreational as well as being unable to open their recreational grow houses until 1/1/14 so of course there's a limited supply right now.
2014-01-17 01:26:03 PM  
1 vote:

midigod: Yeah, how does it work? Legal pot is currently twice as much at retail as medicinal or illicit pot. Is that what the free market was supposed to do?

Are you blaming the high taxation of legal recreational weed on the free market?
2014-01-17 12:43:53 PM  
1 vote:

Target Builder: It's a relatively easy to grow plant that can be readily cultivated in most of the United States, it should be almost impossible to make a lot of money selling the stuff.

Making "beer" is trivial
Making beer that doesn't take like ass requires actual skill
2014-01-17 11:46:00 AM  
1 vote:

factoryconnection: Diogenes: factoryconnection: The Stealth Hippopotamus: haha wut?!

Well, in Amsterdam they're legal, but they ain't 100% legal.

It's kind of like the difference between "innocent" and "found not guilty."

Or "the ruling on the field stands" vs. "the ruling on the field is confirmed."

Also CO isn't 100% legal. There is that whole federal thing and all.

Since we are splitting hairs, lets split all the hairs.

Frankly I'm for legalizing weed. Still won't matter to me personally since I'm under DOT regulations.
2014-01-17 10:55:07 AM  
1 vote:
Also: TFA: the world's first legal pot shops opened for business.

haha wut?!
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