Paltry pot inventory pushes prices up

December 10, 2011

Supply, demand, plant mold, and federal busts are pushing up the price of marijuana in California. [California Watch]

And braced by threats from the U.S. Justice Department, property owners who rent to dispensaries now face the possibility of their property being seized. Many are closing.

That’s bad news for medical marijuana users, the dispensary operators, and others who enjoy current commerce because of the plant, but a plus for bolder growers willing to step into the breach.

In a marketplace where the product’s price has been steadily declining since 1996, this constriction has some buyers paying as much as 40 percent more, with the wholesale price rise occurring just over the past year or so. Now, even a buyer with an established source can expect to pay $2,000 to $2,500  or more a pound for decent-quality pot.

Economic factors and nature have played a role in the diminishing inventory of high-quality, outdoor-grown cannabis available for California marijuana consumers. But the biggest single contributing component has been stepped-up,  hyper-active enforcement of federal laws by the DEA and other U.S. law enforcement agencies.

The rapidly expanding production of potent marijuana in this state has gotten the attention of federal authorities who often enlist the aid of local sheriffs’ departments to raid licensed pot dispensaries — busts that often are highly publicized.

Now law enforcement authorities are reporting a surge in so-called “black market” sales by those growers who remain, many of whom are shrinking their harvest and increasing profits by sending their product out-of-state for two and three times the money.