California's pot economy is crashing. What comes next?

sfgate.com

3 points·Stratoscope··5 comments

"the effective tax rate can climb to as high as 34% when factoring in state sales tax and local taxes. That’s made California’s legal pot extremely expensive compared with other West Coast states — and made the illicit products, which are sold tax free, a cheap alternative."

Across retailing, stores sell branded products at a substantial premium to generic products(Coke vs the generic pop in the local grocery store), yet most people still prefer the branded products. In the pot industry one would expect the preference to be even stronger because the legal branded product is going to be a consistent quality--while the illegal stuff make be fake or adulterated. So I don't understand the California preference for the illegal pot.

An experienced cannabis consumer can tell immediately by the look, texture, aroma, and other cues about the quality of the product. Also, we're not talking about cruisin' for drugs down in the hood. Many users have ongoing, trusted relationships with the growers or the distributors. It's a networking thing, and it's how cannabis has been consumed in California for many years before this misguided attempt at legalization.

The only thing you can genuinely tell for sure from superficial qualities is if it was cured properly, and that nothing is horribly wrong.

Otherwise it's correlation vs causation. You can grow and harvest mediocre weed with a lot of care and it'll look great and still be mediocre.

> an overinvested market with nowhere near enough people buying pot

Taxes could be lower and regulations could be simplified, but this seems like the crux of it. Lots of people jumped in to a new market, and the actual demand can only sustain a fraction of them.

Probably unemployment, if your job title is "Cannabis editor".

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