Quote Originally Posted by rightwinger
LOL--there is a cost associated with growing indoor marijuana. And it's very expensive. California right now is paying approx. 32 cents per kilowatt hour for electricity--more than twice as much as other states.

So then we have to assume this person is talking about out-door grows--that only come in ONCE a year--that's it.

If marijuana is legalized in California this November--the "demand" for marijuana will sky-rocket. And basic economic's 101 tells us that when demand is high for a product--and there is not enough around to supply that demand--what product is around will go through the roof in price.

The ONLY time the price drops--is when there is too much inventory--or supply--and not enough demand. I don't see that happening in the near future.

Simple economics 101.
Well it's silly to keep this to an economics only discussion, since there are many other issues in play. Pot will never be legalized, there are simply to many fingers in that cookie jar, from cops to judges to treatment to everything else that deals with the illegality of marijuana. You also have to contend with the religious right, who consider marijuana to be just as 'bad' as heroin.

For example, if we assume total legality, is that for anyone who wants it? Would it be regulated like alcohol and tobacco? I think you have to assume yes if you'd like to continue this discussion, right? Assuming marijuana is legalized and regulated, I would argue that those parameters wouldn't increase demand enough to warrant a large increase in price. I think there is a lot of saturation in the market right now as people sell off extra inventory to remain compliant. I think there is enough inventory around, whether it be stuff on craigslist, or dispensaries or whatever else. Plus, more demand means more revenue for MMC's, so a crash in inventory or huge demand increase would only be a 90 day-ish, one crop timeline right?

I am not an economist.