And also have tiny market shares, and are increasingly being bought up by A-B.
No shit!
Here’s a question- if you have to produce under $500/lb to remain profitable, how do you achieve that?
A: Volume production (duh, you knew this!) of course volume production requires (dun duh dun dun) high capitalization in order to purchase or rent land/warehouse space.
Also currently, strains are not IP. I don’t expect that to be the case for much longer, and in which case a) we’ll see an arms race for the most popular strains and b) ma and pa won’t even be able to sell Jack Herer, Gorilla Glue, pineapple Kush etc.
[quote=“Urbanacus, post:34, topic:120638”]
there’s no barriers to small farmers planting[/quote]
Go throw a few seeds in your backyard, see if you can turn a profit. Good luck.
Currently the largest grow in the US is in AZ, at 300 acres. There are larger ones internationally. In a severely limited market. There will be kiloacre+ grows throughout the world within the next handful of years. As the market opens up, the pressure on holdout states will increase dramatically, a domino effect (which is exactly the long game legalization proponents have been pushing) that will essentially throw gas on the fire. Legal Marijuana is happening, and it will be a massive global market. Billionaires and billion dollar multinationals already have skin in the game and those investors demand growth.
The funny thing about this to me is that the fantasy of a wide-open small player market would only be possible in Oregon with strict regulation, like the initial (now scrapped) rule limiting out-of-state investment.
That is what happens when the barrier to entry is high. Here the barrier to entry is around the same as other agricultural products. Which hasn’t really produced a monopoly in say corn or wheat production. It isn’t real good for small farmers either, but we are far from having a single dominant player.
The primary complicating factor will be that it remains illegal on a federal level, so farms are geographically restricted to selling inside the state (at least legally), and can have some issues with banks which might mean less access to things like loans.
Again, blueberries and string beans ain’t corn. Once you leave commodity crops the economics change dramatically. Once fully legal I just don’t think there’s going to be the consumption to make large scale grows work. I also don’t believe the economies of scale apply as much in hand labor intensive agriculture like this. It isn’t like you’re using that $1m combine to harvest 10k acres.
Now that the legal bulkhead has been established, R+D for automation/industrialization has begun in earnest. The big grows I’m referencing do not rely on stoners working for $15/hr + a bag of trim, they have trimming machines.
Labor requirements are no longer what they once were.
Holy shit no im not gonna do your googling for you. That said, I will repeat myself since you must’ve missed it— billionaires, and giant multinationals have thrown their hat in the ring- I don’t think you understand the scale of the current market, let alone what a mature market will look like ten years down the road.
Blame the racists from Slippery Dick to House Elf Sessions.
That’s not what’s happening here.
In a freer market the law of comparative advantage would kick in and Oregon’s farmers could trade the bumper crop to pot-legal states that grow less until their harvests adjust. But because the Federal government wantonly violates the Tenth Amendment of the US Constitution, the free trade of a valuable agricultural product between willing states is a Federal crime. SCOTUS should really do something about that.
Fruit in the US is also often grown on a contract basis. Which is why you see those branded fruits at the store. Outside the US and for some US grown fruits (Pineapple, Bananas) these things are frequently grown in a plantation system when the corporation owns the orchards/fields themselves. Spices are almost always grown (when they’re grown) in a plantation system.
And if you think pot isn’t going to turn into a commodity crop with legalization then you haven’t really thought it out.
Why would the 10th amendment apply when the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes” is a power quite specifically delegated to the United States by the constitution; rather than being one of the powers not delegated, that are reserved to the states and/or people?
I’m enormously contemptuous of the ‘well, actually, intrastate commerce is interstate commerce because it’s, all, like, connected man’ theory of interstate commerce clause theory; but trade between states is pretty interstate-commerce-y.
Doesn’t mean that prohibition is good policy(it isn’t); but I’m not sure how you’d strike down regulations promulgated on the basis of an enumerated power on 10th amendment grounds; or sell state-to-state trade as not interstate commerce.
There was a terrific episode of Radiolabs “indivisible” series on just how the Commerce clause became the Kryptonite of the Constitution.
@Ryuthrowsstuff, check what is meant by “commodity crop”, I don’t think it means what you think it means. Ex: fresh apples aren’t a commodity crop, there’s variety, they’re sold fresh to market. But apple juice is.
To qualify as a tradable commodity, an item has to be pretty uniform. “Corn is a classic example of a commodity,” says Dan Manternach, Ag Services Director at Doane Advisory Services in St. Louis, “A cereal manufaturer who makes cornflakes will buy anybody’s corn, as long as it meets certain quality standards. It’s grade #2 corn.” Manternach says a true commodity has the same value no matter where it’s from or who produced it.
My point was it isn’t only commodity crops that are grown that way. And while the definition of “commodity” in investment/financial terms is rather specific. Commodity Crops and Cash crops are a broader concept when it comes to agricultural practice and policy. A lot of things act an awful lot like commodities without technically being commodities. The apples grown for commodity apple juice concentrate are not the apples you see laid out in your produce department. Its a separate market, built around a commodity, involving the growing of specific apples for that market. To which those other varieties of apples do not, and largely can not, have access. The apple juice business does not just switch from Macoun to gala. They have their specific varietals grown specifically for them. Much like the tobacco business has a handful of specific tobacco varietals grown specifically for the production of reconstituted sheet tobacco. And will not suddenly switch to using shade grown Connecticut leaves if the price there is some how lower.
And again. As soon as there is a legal interstate trade in Marijuana. And its sufficiently safe for large companies to get involved. Marijuana is likely to become a commodity over time. Or at least move into market and agricultural dynamic that operates on the same terms.
That’s actually assumed to a certain extent by a lot of the legalization arguments. All of the projections of of tax revenue and profits to be made are predicated on a mass market. And frankly all of the “Phillip Morris has a secret joint factory” rumors, and specific attempts to limit growers, play directly to the base assumption. Broadly. That the tobacco industry will specifically try their damnedest to enter this particular market and commodify it.
These are large industries that thrive off vertical integration. Whether they enter the pot business. Or equivalents arise there. They will pursue the same methods. And even where you still see your Purple Banana and Stanky Kush artisanal, slow grown bud. There will be a commodity version of it, there will be large operations and consolidation.
I’m not really surprised to hear Oregon is growing “too much” weed. There’s a reason we see so many edibles and oils and resins. They’re more concentrated and more shelf stable. A fresh crop is only good for so long. And extracted oil has a much longer shelf life. The refined THC or CBD essentially has an infinite one. With excess product that has a shelf life. You either cut prices drastically and spend money to market heavily in hopes of moving it. Eat the loss when it expires. Or find some other way to move it or some way to extend your sale window. Option 3 is just a step towards a commodity style market. And we already see it. I don’t think I’ve seen anyone whip out anything but an oil vaporizer in a year or two. Fresh pot is already an enthusiast rarity where I’m at (it isn’t legal here).
IMHO the expansive interpretation of the Commerce Clause has been used by the federal government to justify the agricultural and drug powers the framers of the Constitution never intended. In some cases that’s been a net positive. In the case of prohibition past and present it’s been catastrophic in enabling organized crime, federalizing Jim Crow and, along with regulatory capture, overreaching IP laws and the perverse incentives of publicly traded medical companies, has contributed to the monopolist abuses of Big Pharma and Big Agri.
Unfortunately, SCOTUS has historically taken the expansive view of the Commerce Clause to which you alluded, with little willingness to reign in the powers assumed by the other two branches under it.
So yeah, you’re legally right. I don’t have to like it which is why I was being snarky. Sadly, with SCOTUS moving toward increasingly embracing the super-citizenry of large corporations, it seems unlikely this will change in our lifetime. And it’s unlikely SCOTUS will arrogate to itself the power to annul the Scheduled Drug prohbition, so we must wait for enough to states to legalize it and then Congress will legalize it because they work for big business, including the emerging Big Pot, not for us.
