Back in 2015 I asked “Legal marijuana questions: (1) why does it cost more than spinach?“
Here’s an update from The Guardian, “How do you move mountains of unwanted weed?”:
He invested $250,000 in the structural build-outs, lighting, environmental controls and other initial costs to achieve a 5,000 sq ft, Tier I, OLCC-approved indoor canopy.
Ongoing labor and operational costs added another $20,000 a month.
Weed prices were high: Duyck forecast a $1,500 return per pound. If Duyck could produce 20lb of flower a week, he’d make back his money and start banking profits in just three months.
Duyck sent 60lb of pot to the auction block in December. He had adjusted his expectations downward: he hoped to see something in the ballpark of $400 a pound.
It sold for $100 a pound.
It still seems to cost more than what we pay for spinach:
a gram of weed was selling for less than the price of a glass of wine.
The $4 and $5 grams enticed Scotty Saunders, a 24-year-old sporting a gray hoodie, to spend $88 picking out new products to try with a friend. “We’ve definitely seen a huge drop in prices,” he says.
Across the wood and glass counter, Bridge City owner David Alport was less delighted. He says he’s never sold marijuana this cheap before.
“We have standard grams on the shelf at $4,” Alport says. “Before, we didn’t see a gram below $8.”
How much of that is taxes? At what point can I declare victory for predicting that growing marijuana wouldn’t yield more profit, or have a higher pre-tax wholesale cost, than growing other plants? Not quite yet, presumably. From what I can tell from a quick search, whoelsale spinach is about $2 per lb. Thus, wholesale marijuana even in these depressed times is 50X the price of spinach. But I can’t figure out why!