Old School vs. New School Pot Busts Illustrate Black Market Economics 101

Way to ruin the afternoon buzz, BFP online...

Way to ruin the afternoon buzz, BFP online...

"Responding to a citizen's tipoff" police in Williston discovered and seized 63 marijuana plants, almost a pound of processed pot, and 'a large amount of cultivation equipment,' at the home of a 45 year old Vermont man.  He was arrested on charges of cultivating more than 25 marijuana plants and possessing more than 2 ounces of cannabis product.

"Separate incident"

"Separate incident"

In a separate incident, Vermont State troopers on Friday arrested a 64 year old Vermont man in  Westford, after finding 36 marijuana plants outside his Cambridge Road home, according to a news release from the Department of Public Safety.

Old School: There is a dispute, someone gets pissed and calls the police...this source (I'm insinuating is a competitor if you can't read between the lines) knows enough valid information that police can get a search warrant, police make bust and 1-2 other people go down for talking/not talking.

Meanwhile, over in the granite state...

nh laundering
arrested for marijuana

THIS is the current paradigm of the illicit market: people ship weed from west to east, receivers either directly send money, or launder it back through some sort of business shell or other financial interaction.  Some have speculated that shipping cannabis is the only thing keeping the USPS in business, which is probably hyperbole, but represents the greater point.  Read "Pot Has Gone Postal" from theleafonline.com for more background, including how cops can dress up as Fed Ex drivers to bust recipients.

New School: a dealer gets a 'relationship' with someone who grows/buys out west, recruits someone to receive a package in the mail:

hey, I'll give you a free ounce if you let my friend send you something, don't worry, it's super legit and you can't get in trouble, won't even have your correct name on it..."

...if not arrested, the recipient connects with another local dealer to deliver the large amount, and gets a small cut in the form of weed.

onclusions:
  • ECON 101: as long as there is arbitrage, trading will happen.  Even if hypothetical marijuana laws in NH and VT were the same, there would still be imbalances in supply & demand, this is why people drive from Boston to buy Heady Topper and sell it down there for $10/can.
  • As there is ZERO legitimate supply for non-patient adults who want to consume, the demand leads to an enormous national illicit market where people over produce so they can send a $2000 pound to VT for $3000 to a dealer who can sell that for $4800.  The amount that does get caught in the mail is simply 'price of doing business'; do package carriers like Fed Ex/USPS have incentive to eliminate this huge part of their existing business, or do just enough?
  • There is not a single state, that will solve this issue with it's own legalization/regulation laws or solutions.  Ultimately, as more and more states allow legal consumption/cultivation, more and more states will packages heading out to the remaining prohibition states...this doesn't sound like a good thing, but that increased supply lowers the aforementioned margins and discourages dealers from taking those risks..keep illegal weed local and
  • Since it's back to school season, a PSA for the kids out there who thinks that there's no harm in 'catching' a package from out West: you only risk harming yourself, as you're being played by parties making enough money to give you $300 for assuming a risk they won't.  Just ask yourself how much you're willing to trust the genius that sells you your pots.