The Economics of Quasi-Legal Marijuana

A blog about business and economics.
Nov. 14 2012 9:57 AM

The Economics of Quasi-Legal Marijuana

A man shows a type of marijuana at a farm near Medellin, Antioquia department, Colombia on October 3 , 2012.

Photo by RAUL ARBOLEDA/AFP/GettyImages

I did a column on the likely price of marijuana under the new legalization rules in Washington and Colorado, concluding that the impact on prices is likely to be pretty modest. But that's because as long as marijuana remains illegal in the United States of America, the large-scale production of marijuana is going to continue to be practically impossible.

The DEA obviously can't police low-level retailing, so if states and localities say it's legal it'll be a lot simpler in practice to get some pot. But the main reason marijuana is a relatively expensive agricultural commodity right now is that you can't grow it in giant efficient farms and dry and package it in proper factories. To do that stuff, it has to be really and truly legal so you can attract investors and do things that could be easily spotted from a surveillance plane.


In a sane world, the federal government would just back off and focus on blocking exports from Colorado and Washington. Then we might actually learn something about (a) the pretax price of legal marijuana and (b) the extent of feasible taxation before you just get massive evasion. But I doubt that's the world we live in.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.


Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

Two Damn Good, Very Different Movies About Soldiers Returning From War

The XX Factor

Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough

So they added a little self-immolation.


Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Sept. 20 2014 11:13 AM -30-
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
Brow Beat
Sept. 20 2014 3:21 PM “The More You Know (About Black People)” Uses Very Funny PSAs to Condemn Black Stereotypes
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 20 2014 7:00 AM The Shaggy Sun
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.