6 ms·

Market Size and Demand for Marijuana in Colorado [pdf]

56 points by dsirijus 12y ago

bruceb 12y ago
Lots of non state residents buy: purchases by out of state visitors currently represent about 44 percent of metro area retail sales and about 90 percent of retail sales in heavily visited mountain communities. So nearby state might want to stop losing money and make it legal also.
- bellerocky 12y ago
  Wow. I'd think that transporting any kind of marijuana across state lines as a seriously illegal act. If so it strikes me as incredibly risky and ill advised. Why would so many people risk so much for pot?
  - alelefant 12y ago
    I think that answer is easy: $$$. A lot of drugs cross state and country lines, so the fact that it's crossing the border of Colorado surely was expected.
  - gdubs 12y ago
    I think you'll find that people have been taking legal risks for marijuana (and any other drug) for a very long time. Take New York, for example. There have historically been laws so strict that possession of even small amounts can result in long jail sentences. The people taking pot out of Colorado probably don't see it as more risky than buying it illegally in their native state.
    - DonGanja 12y ago
      I'm not sure NY is a great example because possession and consumption in private has been legal for decades. Your point stands however-- draconian anti-cannabis laws do exist, and enthusiasts will nonetheless take risks to indulge.
  - pjeide 12y ago
    I think you've misunderstood. Out of state visitors aren't necessarily trafficking. They are coming to indulge. The retail prices are prohibitively hard to turn a profit from resale, even in the most lucrative non-legal out of state markets. I met an oil guy from Texas who had come into the state on business and had purchased some pot for himself. Due to the nature of his business he couldn't actually smoke any.. he just wanted to buy some for the novelty, to give away to others.
  - DonGanja 12y ago
    Two factors: risk of getting caught is relatively low if one is careful, and penalties are fairly minor if apprehended. In my case, I never board a domestic flight without at least four bluntsworth of bud. And recently have been taking the same approach for international flights originating in the US with stops and terminus in countries with a strong tradition of rule of law and/or cannabis tolerance (ie, most of Western Europe, North and Latin America).
- bcoates 12y ago
  The areas around Colorado are almost entirely unpopulated, most people going to 'heavily visited mountain communities' are either local to Colorado or travelling in from a long distance.
- jobu 12y ago
  My guess is that a majority of visitors consume what they buy within Colorado. There are pot-tourism operations springing up, such as ski shuttles from Denver Airport that provide marijuana for the ride to the resort.
alelefant 12y ago
I'm surprised at how polarized the usage percentages are. Near 50% are using between 1-5 times a month and a touch over 20% are using 26-31 times per month (daily). It sounds like people are either using casually or they throw all their chips in (not that I blame them). Hopefully Wisconsin can join the club in the next decade.
- gwern 12y ago
  What's also interesting is that you would expect that such extreme polarization would show equally extreme negative effects, if they exist, since it means you have a large population of users exposed to high doses where negative effects should be most obvious. (Imagine that it takes 10 times per month to put someone at risk of going crazy, robbing or killing people, torching houses, etc. If the distribution of use was a straight line down to just a few % of the heaviest users reaching 10 times per month, you wouldn't necessarily see much of an increase in population numbers. But with a crazy distribution like that, it's >20% of users who would be exhibiting side effects!)
  - pjeide 12y ago
    Reefer Madness was not a documentary. Going crazy? Robbing and killing? Arson? You've clearly never smoked pot. EDIT: As pointed out by the replies, I clearly didn't do my research before responding ;) Apologies.
    - kirubakaran 12y ago
      You are replying to http://www.gwern.net/ http://www.gwern.net/ :-D My money is on him having smoked pot.
    - GFischer 12y ago
      Check gwern's site :) http://www.gwern.net/ http://www.gwern.net/ He has experimented with lots of drugs, up to and including LSD. By the way, a close relative does smoke pot (it's legal in my country, Uruguay) and we believe it has brought to the front some (probably preexisting) mental problems which could be described as "going crazy". I do support legalization, but it's not entirely innocuous (it is my belief it's milder than alcohol, but then again, alcohol does bring some extreme reactions and kills a lot of people)
DanBC 12y ago
The war on drugs has caused immeasurable harm. http://www.irinnews.org/in-depth/100080/114/war-on-drugs-collateral-damage http://www.irinnews.org/in-depth/100080/114/war-on-drugs-col... Making drugs legal means we can treat the medical harms; spend time and money tackling the actually nasty things in the supply chain (two friends sharing a lump of cannabis = fine; a trafficked worker being forced to work in an illegal squat cannabis factory = probably bad).
gdubs 12y ago
"The demand for marijuana by Colorado adult residents is estimated to be 121.4 metric tons in 2014" Big number, tough to visualize: [see answer below, which did the conversion better than my attempt :]
- djb_hackernews 12y ago
  google says 121.4 metric tons = 267,641.186 pounds or 4,282,258.98 ounces
  - gdubs 12y ago
    Thanks -- screwed up the google conversion when I did it. That sounds more like it. That's an enormous amount -- basically could be visualized as the warehouse in Indiana Jones "Raiders of the Lost Ark".
- windsurfer 12y ago
  To make it easier to visualize, it's a little over the carrying capacity of a Boeing 747-200F aircraft
  - gdubs 12y ago
    In weight, not volume though, right?
  - dyladan 12y ago
    Or 2 times the weight of an average blue whale.
- bcoates 12y ago
  264 million joints worth, enough to give one RAND Corporation standard 460mg joint to each adult in the US.
cloudwalking 12y ago
Marijuana is an enormous growing market. Legalization will take hold over the next 10 years and the market will grow 100x what it is now. This is a golden opportunity for entrepreneurs.
- GregorStocks 12y ago
  The market could perhaps grow to 100x the sales volume, although that seems doubtful considering 7% of US adults already claim to smoke marijuana - http://www.gallup.com/poll/163835/tried-marijuana-little-changed-80s.aspx http://www.gallup.com/poll/163835/tried-marijuana-little-cha.... There's no way it'll grow to 100x the revenue, though. Without illegality driving up the price, its price ought to plummet until it's about as cheap as any other agricultural product, apart from high sin taxes (which don't help potrepreneur profit).
  - dvanduzer 12y ago
    cheap as any other agricultural product, like tobacco and processed hops, which (as I understand it) are things that everyone in south carolina grow at home. bathtub moonshine has left Pete Coors a pauper. this was actually one of the least expensive investor expos in town this year: http://cannabiscapitalsummit.org http://cannabiscapitalsummit.org
- mcdougle 12y ago
  I was actually just discussing this with a buddy at lunch today. I'm far from CO or WA so all I know is what I read online, but it seems like all of the providers are small dispensaries. There seems to be a lot of room for someone to move in and become the "Budweiser" of weed -- a larger company that sells low-cost weed at scale. My guess is that there are already some richer entities positioned to take advantage of that once more states legalize. My buddy actually said he thinks that's one of the reasons it's taken so long -- the powers that be are probably holding off legalization until they can get their money and resources into place to take advantage.
  - Zelphyr 12y ago
SheepSlapper 12y ago
My hometown of Spokane, WA just opened the first legal marijuana store all of two days ago. They sold out right away, so... the demand is definitely there. What will be really interesting to see is how the state can compete with the existing growers/dealers RE: price. Right now to buy marijuana legally in Spokane it's about $700/oz. Your friendly neighborhood dealer will have it for $200. As it is now, there's not a lot of incentive for the old growers/dealers to go legal, because it'll cut into their profits (and their customers won't want to pay more anyway).
- gwern 12y ago
  The paper notes a similar dynamic: right now, it's much cheaper to buy marijuana there as a medical marijuana user, and so 'retail' sales are only a small fraction of total consumption because they're having a hard time competing on price. (This explains something that confused me in coverage: out of state visitors represent a majority of retail purchases, it seems, but they represent <10% of total consumption - because all the locals are buying medical marijuana, growing their own, getting weed from 'caregivers', etc.0
pjeide 12y ago
I think it is worth mentioning that violent crime and property crime are down more than 10% post-legalization, that the state forecasts $30M in tax revenue, and $2M has already been created for local schools. http://rt.com/usa/163644-colorado-marijuana-crime-drop/ http://rt.com/usa/163644-colorado-marijuana-crime-drop/
- hyperbovine 12y ago
  I'd love to know whether DUIs have also fallen. Liquor and beer manufacturers are among the biggest opponents of marijuana legalization campaigns.
  - Osiris 12y ago
    I don't have the stats but I read an article from a local news organization that arrests for driving while under the influence of marijuana are up significantly. However, that could be just increased enforcement or awareness by police to look for it than actual incidents of driving while high.
    - cdash 12y ago
      Very likely, and even if it were not the case you could still have a net decrease in DUIs with an increasing amount of marijuana DUIs. I am pretty sure there have been some studies that show people under the influence of marijuana are less likely to drive than people under the influence of alcohol so it just depends on whether marijuana is replacing alcohol or not.
    - jbail 12y ago
      These driving while high statistics are pretty error prone. There is no marijuana breathalyzer. A blood test shows traces of THC in your body from up to 30 days ago. So if you get in an accident and get blood tested and it comes back positive, were you high at that moment? Or a week ago? Or a month ago? I'm sure the technology will improve. In fact, a "marijuana breathalyzer" (using that term loosly because you would need something that can test for edibles too), is probably a pretty interesting product to bring to market

56 points by dsirijus 12y ago

Lots of non state residents buy: purchases by out of state visitors currently represent about 44 percent of metro area retail sales and about 90 percent of retail sales in heavily visited mountain communities. So nearby state might want to stop losing money and make it legal also.

bellerocky 12y ago
Wow. I'd think that transporting any kind of marijuana across state lines as a seriously illegal act. If so it strikes me as incredibly risky and ill advised. Why would so many people risk so much for pot?
- alelefant 12y ago
  I think that answer is easy: $$$. A lot of drugs cross state and country lines, so the fact that it's crossing the border of Colorado surely was expected.
- gdubs 12y ago
  I think you'll find that people have been taking legal risks for marijuana (and any other drug) for a very long time. Take New York, for example. There have historically been laws so strict that possession of even small amounts can result in long jail sentences. The people taking pot out of Colorado probably don't see it as more risky than buying it illegally in their native state.
  - DonGanja 12y ago
    I'm not sure NY is a great example because possession and consumption in private has been legal for decades. Your point stands however-- draconian anti-cannabis laws do exist, and enthusiasts will nonetheless take risks to indulge.
- pjeide 12y ago
  I think you've misunderstood. Out of state visitors aren't necessarily trafficking. They are coming to indulge. The retail prices are prohibitively hard to turn a profit from resale, even in the most lucrative non-legal out of state markets. I met an oil guy from Texas who had come into the state on business and had purchased some pot for himself. Due to the nature of his business he couldn't actually smoke any.. he just wanted to buy some for the novelty, to give away to others.
- DonGanja 12y ago
  Two factors: risk of getting caught is relatively low if one is careful, and penalties are fairly minor if apprehended. In my case, I never board a domestic flight without at least four bluntsworth of bud. And recently have been taking the same approach for international flights originating in the US with stops and terminus in countries with a strong tradition of rule of law and/or cannabis tolerance (ie, most of Western Europe, North and Latin America).
bcoates 12y ago
The areas around Colorado are almost entirely unpopulated, most people going to 'heavily visited mountain communities' are either local to Colorado or travelling in from a long distance.
jobu 12y ago
My guess is that a majority of visitors consume what they buy within Colorado. There are pot-tourism operations springing up, such as ski shuttles from Denver Airport that provide marijuana for the ride to the resort.

alelefant 12y ago

I'm surprised at how polarized the usage percentages are. Near 50% are using between 1-5 times a month and a touch over 20% are using 26-31 times per month (daily). It sounds like people are either using casually or they throw all their chips in (not that I blame them). Hopefully Wisconsin can join the club in the next decade.

gwern 12y ago
What's also interesting is that you would expect that such extreme polarization would show equally extreme negative effects, if they exist, since it means you have a large population of users exposed to high doses where negative effects should be most obvious. (Imagine that it takes 10 times per month to put someone at risk of going crazy, robbing or killing people, torching houses, etc. If the distribution of use was a straight line down to just a few % of the heaviest users reaching 10 times per month, you wouldn't necessarily see much of an increase in population numbers. But with a crazy distribution like that, it's >20% of users who would be exhibiting side effects!)
- pjeide 12y ago
  Reefer Madness was not a documentary. Going crazy? Robbing and killing? Arson? You've clearly never smoked pot. EDIT: As pointed out by the replies, I clearly didn't do my research before responding ;) Apologies.
  - kirubakaran 12y ago
    You are replying to http://www.gwern.net/ http://www.gwern.net/ :-D My money is on him having smoked pot.
  - GFischer 12y ago
    Check gwern's site :) http://www.gwern.net/ http://www.gwern.net/ He has experimented with lots of drugs, up to and including LSD. By the way, a close relative does smoke pot (it's legal in my country, Uruguay) and we believe it has brought to the front some (probably preexisting) mental problems which could be described as "going crazy". I do support legalization, but it's not entirely innocuous (it is my belief it's milder than alcohol, but then again, alcohol does bring some extreme reactions and kills a lot of people)

DanBC 12y ago

The war on drugs has caused immeasurable harm. http://www.irinnews.org/in-depth/100080/114/war-on-drugs-collateral-damage http://www.irinnews.org/in-depth/100080/114/war-on-drugs-col... Making drugs legal means we can treat the medical harms; spend time and money tackling the actually nasty things in the supply chain (two friends sharing a lump of cannabis = fine; a trafficked worker being forced to work in an illegal squat cannabis factory = probably bad).

gdubs 12y ago

"The demand for marijuana by Colorado adult residents is estimated to be 121.4 metric tons in 2014" Big number, tough to visualize: [see answer below, which did the conversion better than my attempt :]

djb_hackernews 12y ago
google says 121.4 metric tons = 267,641.186 pounds or 4,282,258.98 ounces
- gdubs 12y ago
  Thanks -- screwed up the google conversion when I did it. That sounds more like it. That's an enormous amount -- basically could be visualized as the warehouse in Indiana Jones "Raiders of the Lost Ark".
windsurfer 12y ago
To make it easier to visualize, it's a little over the carrying capacity of a Boeing 747-200F aircraft
- gdubs 12y ago
  In weight, not volume though, right?
- dyladan 12y ago
  Or 2 times the weight of an average blue whale.
bcoates 12y ago
264 million joints worth, enough to give one RAND Corporation standard 460mg joint to each adult in the US.

cloudwalking 12y ago

Marijuana is an enormous growing market. Legalization will take hold over the next 10 years and the market will grow 100x what it is now. This is a golden opportunity for entrepreneurs.

GregorStocks 12y ago
The market could perhaps grow to 100x the sales volume, although that seems doubtful considering 7% of US adults already claim to smoke marijuana - http://www.gallup.com/poll/163835/tried-marijuana-little-changed-80s.aspx http://www.gallup.com/poll/163835/tried-marijuana-little-cha.... There's no way it'll grow to 100x the revenue, though. Without illegality driving up the price, its price ought to plummet until it's about as cheap as any other agricultural product, apart from high sin taxes (which don't help potrepreneur profit).
- dvanduzer 12y ago
  cheap as any other agricultural product, like tobacco and processed hops, which (as I understand it) are things that everyone in south carolina grow at home. bathtub moonshine has left Pete Coors a pauper. this was actually one of the least expensive investor expos in town this year: http://cannabiscapitalsummit.org http://cannabiscapitalsummit.org
mcdougle 12y ago
I was actually just discussing this with a buddy at lunch today. I'm far from CO or WA so all I know is what I read online, but it seems like all of the providers are small dispensaries. There seems to be a lot of room for someone to move in and become the "Budweiser" of weed -- a larger company that sells low-cost weed at scale. My guess is that there are already some richer entities positioned to take advantage of that once more states legalize. My buddy actually said he thinks that's one of the reasons it's taken so long -- the powers that be are probably holding off legalization until they can get their money and resources into place to take advantage.
- Zelphyr 12y ago

SheepSlapper 12y ago

My hometown of Spokane, WA just opened the first legal marijuana store all of two days ago. They sold out right away, so... the demand is definitely there. What will be really interesting to see is how the state can compete with the existing growers/dealers RE: price. Right now to buy marijuana legally in Spokane it's about $700/oz. Your friendly neighborhood dealer will have it for $200. As it is now, there's not a lot of incentive for the old growers/dealers to go legal, because it'll cut into their profits (and their customers won't want to pay more anyway).

gwern 12y ago
The paper notes a similar dynamic: right now, it's much cheaper to buy marijuana there as a medical marijuana user, and so 'retail' sales are only a small fraction of total consumption because they're having a hard time competing on price. (This explains something that confused me in coverage: out of state visitors represent a majority of retail purchases, it seems, but they represent <10% of total consumption - because all the locals are buying medical marijuana, growing their own, getting weed from 'caregivers', etc.0

pjeide 12y ago

I think it is worth mentioning that violent crime and property crime are down more than 10% post-legalization, that the state forecasts $30M in tax revenue, and $2M has already been created for local schools. http://rt.com/usa/163644-colorado-marijuana-crime-drop/ http://rt.com/usa/163644-colorado-marijuana-crime-drop/

hyperbovine 12y ago
I'd love to know whether DUIs have also fallen. Liquor and beer manufacturers are among the biggest opponents of marijuana legalization campaigns.
- Osiris 12y ago
  I don't have the stats but I read an article from a local news organization that arrests for driving while under the influence of marijuana are up significantly. However, that could be just increased enforcement or awareness by police to look for it than actual incidents of driving while high.
  - cdash 12y ago
    Very likely, and even if it were not the case you could still have a net decrease in DUIs with an increasing amount of marijuana DUIs. I am pretty sure there have been some studies that show people under the influence of marijuana are less likely to drive than people under the influence of alcohol so it just depends on whether marijuana is replacing alcohol or not.
  - jbail 12y ago
    These driving while high statistics are pretty error prone. There is no marijuana breathalyzer. A blood test shows traces of THC in your body from up to 30 days ago. So if you get in an accident and get blood tested and it comes back positive, were you high at that moment? Or a week ago? Or a month ago? I'm sure the technology will improve. In fact, a "marijuana breathalyzer" (using that term loosly because you would need something that can test for edibles too), is probably a pretty interesting product to bring to market