Market Size and Demand for Marijuana in Colorado [pdf] | Hacker News Reader

Market Size and Demand for Marijuana in Colorado [pdf]

colorado.gov

56 pointsdsirijus66 comments

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.

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!)

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.

You are replying to http://www.gwern.net/ :-D My money is on him having smoked pot.

Check gwern's site :)

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)

I was being sarcastic about peoples' fears about marijuana, yes, and hopefully making my observation a little more salient: since the distribution of consumption is so ridiculously bimodal (look at pg15, it's amazing), that means there are a lot of people getting extremely high doses, but without obvious ill effects.

I wouldn't call 4-5 times a month "very casual" -- that's every weekend.

4-5 times a month would tend to be weekends only. If it was drinking you would consider that to be pretty casual.

Every weekend is "regular" usage. I equate casual with occasional. 0-2 times month, with no regular pattern.

Fair enough, "very casual" wasn't the best adverb to use. I agree with dyladan's point though; drinking on the weekends would certainly be considered casual in my circle of friends.

You clearly weren't in a frat ;)

(thankfully) ;)

That's offensive.

Get over it.

That's not surprising. You can use cannabis once or twice a week (in moderation) and not suffer any significantly negative effects. But once you start to use it more often then that, you're basically going to be in withdrawal all the time unless you're just baked 24/7. It's not really any different than any other drug.

There is no withdrawal with Marijuana (unless you smoke it with tobacco). It's not physically addicting. Now people say "well but it's mentally addicting". Well so is reading a good book. I don't want to make Marijuana appear completely safe (it's definitely not), but addiction is not one of the resulting problems.

http://abcnews.go.com/Health/kicking-pot-habit-lead-withdraw...

The withdrawal symptoms aren't especially serious in the grand scheme of things, but they're still unpleasant enough to discourage people from getting stuck in that 5 - 20x per week range.

With first "offenders" being "diverted" to "treatment" there is all kinds of quackery going on in the "treatment" business, ranging from true believers in reefer madness to profiteers, to nudge-and-wink "treatment" that is just barely serious enough to keep people from going to jail instead.

With all the perverse incentives in play, I'd sooner trust the TSA's numbers for how many terrorists there are with long fingernails.

There are many more attendees of M.A. meetings than there are of people in recovery, trying to quit reading because it's had life-altering effects on their minds.

"Addiction isn't a problem" is the biggest myth perpetuated in the smoking community. I'm not trying to make pot out to be any more or less monstrous than it is, but to claim that addiction isn't something that happens is to hide one's head in the sand.

> There are many more attendees of M.A. meetings than there are of people in recovery

A lot of people are forced to (or "elect" to) mandatory drug treatment/counseling as an alternative to harsher sentencing for first-time marijuana offenses.

Success rates are obviously low for these, for the same reasons that requiring all college students who ever drink alcohol to attend AA meetings would have low "success" rates.

You can't assume all people who attend drug treatment actually have a drug problem.

It's hard to believe that heavy (daily) users would be purchasing that much marijuana since it's legal for an adult to own up to six plants at a time (or twelve per household). It seems unlikely to count all of their usage as part of the marijuana market.

Growing your own marijuana will be similar to making your own beer or wine. It takes a lot of work and time and therefore most people won't do it. But yeah, of course some will.

I think a lot of people are growing it casually on their own. I see plants in backyards all the time here in Denver. It's not really that comparable to homebrewing which needs equipment and skill. More like gardening.

Okay but think ahead 10 years. Do you think that's going to linearly extrapolate to the entirety of the United States? Everybody's gonna grow pot now? Doubtful. It's a new exciting thing so a ton of people are doing it. Gardening takes work, growing great pot presumably takes a lot of effort (I have no idea, but I'd assume you'd have to at least do better than outdoors which takes $$ too).

anyone can grow zucchini in their backyard. my parents never harvested early enough, and overgrown squash tastes terrible.

amateur grow operations are not a particularly new and exciting thing in the area, though. nearly 50% of CU Boulder alumni in the last 20 years had a roommate they couldn't get to shut up about grow technique.

How long have you actually lived in Denver? Gardening in the high desert takes quite a lot of equipment and skill: https://en.wikipedia.org/wiki/Xeriscaping

Homebrewing is for nerds who miss the over-clocking watercool rigs of their counterstrike days. Skill and equipment, sure, but the equipment is on eBay and you never need to go outdoors.

Growing is more work than most people have interest for, just as home-brewing is not practical for everyone.

square foot gardening, little to no maintenance other than keeping "weeds" out :)

People frequently and vastly underestimate how much people are willing to pay for the convenience of paying somebody else to do something for them.

Yes, but only to the extent that they themselves aren't willingly paying for the convenience of having somebody else do something for them.

When they are, well, that's just common sense. When they aren't, well, those who do otherwise are just being indulgent.

Housekeeper? Indulgent. Startbucks coffee? Convenient.

The (social) legitimacy of expenditures is usually a matter of custom, not economic analysis.

I think they mis-adjusted their ranges and it's probably a fat-tailed power law distribution. When you survey people there's going to be a peak around "smoke weed every day" but there's a gigantic range of usage between "I take a puff or two off my pipe every afternoon" and "I spend all of my free time stoned out of my mind".

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).

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

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.

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-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).

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

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.

> it seems like all of the providers are small dispensaries

This is accurate. And I've heard several people in the know say that the Philip Morris's of the world are prepared and ready for when it is no longer a RICO issue. At which point they'll swoop in and become the Philip Morris of cannabis. Unfortunately.

Noooo neverrr :(. It's almost as bad as the possibility of GMO cannabis becoming the most common. :(

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.

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?

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.

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.

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.

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.

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).

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.

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.

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/

I'd love to know whether DUIs have also fallen. Liquor and beer manufacturers are among the biggest opponents of marijuana legalization campaigns.

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.

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.

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

The 10% stat is from Denver. Does it hold state wide? Statistically significant? Confounding factors?

I'm genuinely curious, but want to make sure such things are sound before using them in national debate.

Absolutely a stat local to Denver. Worth the clarification for the benefit of non-locals.

> Statistically significant?

A statistically insignificant result is politically significant: it wrecks the 'omg pot smokers will lead to tons of crime' argument some politicians were making.

I wouldn't draw very much from that violent crime factoid. Denver was not exactly the most violent city before legalization, and has its own circumstances, so you wouldn't want to generalize from Denver's example to more violent urban centers like Chicago or New York for example.

Although I absolutely agree that the tax revenue is a great boon.

New York's murder rate is very similar to Denver's, and was actually lower in 2012. Its violent days are long past, and even its bad neighborhoods are as safe from violent crime as its richest 20 years ago: http://observer.com/2013/05/bloomberg-recalls-upper-east-sid...

http://www.city-data.com/crime/crime-Denver-Colorado.html http://www.city-data.com/crime/crime-New-York-New-York.html

"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 :]

google says 121.4 metric tons = 267,641.186 pounds or 4,282,258.98 ounces

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".

To make it easier to visualize, it's a little over the carrying capacity of a Boeing 747-200F aircraft

In weight, not volume though, right?

Or 2 times the weight of an average blue whale.

264 million joints worth, enough to give one RAND Corporation standard 460mg joint to each adult in the US.

The war on drugs has caused immeasurable harm.

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).

Reply on news.ycombinator.com