Potential for Legal Marijuana Sales in California to Supply Rest of U.S.

by Brittany M. Bond, Jonathan P. Caulkins

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The authors use four data sets (two from law enforcement, two from user reports) to estimate that the current price gradient for marijuana in the United States is $300 - $1000 per pound per thousand miles, with $450 being perhaps the best guess. They take this as a measure of the cost of smuggling marijuana through parts of the US interior where marijuana is illegal. They combine this gradient with estimates of post-legalization production costs in California to project the proportion of the lower 48 states for which taxed, legally produced sinsemilla would undercut current sinsemilla prices. This analysis suggests that: (1) legalization of marijuana in California would put downward pressure on sinsemilla prices throughout most of the country and (2) the number of past-year marijuana users outside of California who would find buying taxed California sinsemilla to be cheaper than their current source is roughly six times the number of marijuana users who live in California, so, under the right conditions, “exports” might generate significant excise tax revenue for California.

The research in this report was conducted by the RAND Drug Policy Research Center.

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