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Economies of scale can make a legal product much cheaper even with heavy taxation. See cigarettes for example. No one runs an illicit tobacco farm in the US bec
by ramesh31 1y ago
Economies of scale can make a legal product much cheaper even with heavy taxation. See cigarettes for example. No one runs an illicit tobacco farm in the US because you just can't match the scale to make it profitable. Similar things happening with cannabis now; in parts of the west coast supply is so high that it would be more profitable for small time operators to grow heirloom tomatoes at this point.
- 0cf8612b2e1e 1y agoCigarettes is exactly what I was thinking of for comparison. Most of the price is sin taxes. Remove those and the actual product costs nearly nothing to make. Sales of loose cigarettes is still a thing today where people are moving them from reservations or foreign countries.
- ceejayoz 1y agoSmuggled Dutch tea was something like 80% of the tea on the market. https://en.wikipedia.org/wiki/Tea_Act https://en.wikipedia.org/wiki/Tea_Act > Smuggled tea was a large issue for Britain and the East India Company, since approximately 86% of all the tea in America at the time was smuggled Dutch tea. That's not the case for cigarettes. If it were anything like that percentage, you can bet the Feds would care more.