Colorado Pot Tax Proving More Lucrative Than Expected

Re:Colorado Pot Tax Proving More Lucrative Than Expected by dllthomas on Saturday February 22, 2014 @10:38PM (#7284828)

But it will reduce their profits, as they have to face competition.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dinkumthinkum on Sunday February 23, 2014 @12:42AM (#7285056)

Ever heard of cocaine?

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by monkeyspaw on Sunday February 23, 2014 @04:25AM (#7285382)

I'm not sure of your point. Cocaine does have legal uses, especially with ENT doctors/surgeons, who use it as an effective anaesthetic.

But the profit margins in the illegal drug market is largely because of the risk involved. Facing legal competition, which does not have to include that risk in its price, is effectively creating a market where legitimized producers have an extreme advantage.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dinkumthinkum on Sunday February 23, 2014 @03:44PM (#7287503)

Drug cartels have a myriad of other products, cocaine being one if them. All of their products are commodities worth multiples of their weight in gold. Taking marihuana away from them is not going to make as substantial hit to their profits as you suggest.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dllthomas on Sunday February 23, 2014 @07:28PM (#7288423)

That means we should be legalizing cocaine as well, not that we shouldn't be legalizing pot. And reducing the profits (and thus power) of drug cartels a small amount is still substantially better than not reducing them at all (doubly so if it's something we want to do for other reasons as well).

Edited to add:

Also, while I have no idea as to the veracity, Wikipedia says that over half the cartels' revenue comes from marijuana, and links http://www.npr.org/templates/story/story.php?storyId=1269781... in support.

Given the high fixed costs (salaries, bribes, infrastructure) of maintaining a criminal network, I expect that cutting revenues almost in half would be a tremendous blow to their profits.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dinkumthinkum on Monday February 24, 2014 @01:47AM (#7289438)

You said legalizing marijuana, not all drugs. and legalizing all drugs is much, much different issue. There is a big difference between legalzing just marijuana versus all drugs. I don't think the profits would be reduced at all, simply replaced by other products.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dllthomas on Monday February 24, 2014 @09:48AM (#7291027)

"You said legalizing marijuana, not all drugs."

Well, it wasn't me who said it in the first place, but that aside...

"legalizing all drugs is much, much different issue."

I'm not sure I agree - this is arguably the first step on that path (if we wish to continue down that path). I agree that there will be different outcomes.

That said...

"I don't think the profits would be reduced at all, simply replaced by other products."

I'm not sure you understand how business works. For that to happen, someone needs to start purchasing substantially more cocaine and methamphetamine. If the cartels are capable of making that happen, why aren't they making it happen now?

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dinkumthinkum on Tuesday February 25, 2014 @12:36AM (#7295854)

I think I do k ow how it works; I'm not sure you know how black markets, particularly those based on drugs. If you feel there is any lack of demand of cocaine or meth I guess you are free to believe it.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dllthomas on Tuesday February 25, 2014 @11:34AM (#7298572)

More than doubling your revenues on an existing product is never easy. Doubling production won't do it, because those most willing to pay will be satiated and it won't command the same price. Also, cocaine involves more processing and coca plants grow more slowly and need more space than cannabis, so even doubling revenues isn't going to double profits. It also takes a good year before coca plants can be harvested - and retooling a supply chain can always be expensive. Meth might be easier, but still suffers from the same market depth issue, and still involves building out more infrastructure, which is still expensive. It's also likely to raise the costs of precursors, which will again limit profits.

I really don't see that any of these considerations are any different due to it being a black market - if you think they are, explain why.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dllthomas on Sunday February 23, 2014 @11:22AM (#7286346)

I am also not sure of your point.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by nirnira on Sunday February 23, 2014 @01:57AM (#7285183)

Why not? Legalising drugs destroys every single element which supports violent paralegel cartels.

1) It eliminates legal risk, so drug production becomes instantly a much more lucrative activity, enticing more people to do it.

2) Profits are reduced as the market becomes more competitive.

3) The cartels are unable to pursue their "normal" extralegal means of suppressing competition, because the parties they might seek to suppress now have legal access to state protection.

4) In a competitive, legal market, the successful firms will be the ones which offer the best product - the firms with the best drugs, the highest standards of quality and ethics, the nicest stores, and the best customer service. Why buy from dodgy drug-dealers when you can walk into a beautiful store and get great customer service?

In short term yes, cartels may attempt to protect their monopoly, but in the long term, legalisation dooms them as cultural dinosaurs unable to compete in the new legal, open market.

Edit: This analysis depends upon low taxation. High taxation will still incentivise extralegal selling, but it probably makes the black market a bit safer regardless.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by paulhauggis on Sunday February 23, 2014 @03:59AM (#7285346)

Drug legalization isn't the problem, corruption is. When the cartels can buy any officer and government official in Mexico, legalization will only give them more power.

"4) In a competitive, legal market, the successful firms will be the ones which offer the best product - the firms with the best drugs, the highest standards of quality and ethics, the nicest stores, and the best customer service. Why buy from dodgy drug-dealers when you can walk into a beautiful store and get great customer service?"

Really? So Walmart and Amazon have the highest standard of quality and customer service..really??????

"Why buy from dodgy drug-dealers when you can walk into a beautiful store and get great customer service"

Because money talks. The government will tax and regulate drugs. Many users will not want to pay a higher price for a lower quality product (quality might be THC levels, etc).

Why go to dodgy virus-laden websites to download software and music when you can go into a beautiful store with great customer service?

I'm all for the legalization of MJ, but I feel like common sense goes out the window in any of these discussions.

If the community is all about stopping the violence, why not boycott all cartel grown drugs?

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by angersock on Sunday February 23, 2014 @12:53PM (#7286701)

why not boycott all cartel grown drugs?

Because Bayer and Amazon can drive the bastards out of business much faster, simply by being better organized.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by nirnira on Sunday February 23, 2014 @09:31AM (#7285977)

Walmart and Amazon are hyper-efficient organisations that are able to deliver extremely low-cost goods. Hence their popularity. If ultra low prices are what consumers want, then what's to stop someone attempting to sell marijuana that cheaply? Again, not really a vicious cartel's forte. A cartel's forte is violently excluding competitors to maintain high profit margins in a market hidden from normal legislative balances.

As long as all the growing takes place within the legalisation territory (i.e. nothing is sourced from illicit operations in foreign nations) then I see no reason why violent organisations would dominate legal trade of psychoactive substances.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by dinkumthinkum on Sunday February 23, 2014 @03:48PM (#7287521)

Are you under the impression that legalizing marijuana means legalizing all drugs? There are many other illegal drugs worth many times their weight in gold. So you get rid of marijuana as a means of income; this is no big deal to cartels.

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Re:Colorado Pot Tax Proving More Lucrative Than Expected by nirnira on Sunday February 23, 2014 @07:03PM (#7288329)

I'm not under that impression. But yes legalising all drugs would destroy the cartels. Hopefully one day when society comes to its senses...

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