Report indicates legalizing marijuana may be profitable for businesses!

[Payaso]

In a stunning display of intelligence, California finally realizes that legalizing cannabis could make the state rich, if not at least get out of debt.

But reading the report we also are reminded just why Richard Lee would spend One Million Dollars to get his preferred proposal on the ballot in California.

It wouldn't be all about the Benjamins, now would it?

An economic-impact analysis prepared for a East Bay entrepreneur underscores one of the truths behind the "Tax Cannabis 2010" marijuana legalization measure on November's ballot: It could make some people very, very rich.

Jeff Wilcox of Lafayette, who sits on the ballot measure steering committee, in November formed AgraMed Inc., a nonprofit that commissioned this analysis from Bay Area consulting firm Brion & Associates.

According to an executive summary, the analysis examines AgraMed's proposal to redevelop a big parcel near Interstate 880 and the Embarcadero in Oakland - four buildings totaling 172,000 square feet on a 7.4-acre site - as an industrial-scale, 24-hour-a-day marijuana-growing facility as well as manufacturing space for grow lights and other equipment; a bakery for edible cannabis products; a job-training center; a research lab; and some office and retail space.

The grow operation would produce about 21,100 pounds of medical-grade cannabis per year, about 58 pounds per day on average, according to the analysis, with a wholesale price of about $2,800 per pound. And the analysis assumes the city would impose a "production tax" similar to the special tax Oakland already has put on retail sales at the city's medical marijuana dispensaries.

Given various production and taxation scenarios, gross annual sales would range from $47 million to $71 million per year, with gross operating costs estimated at $31 million per year, the analysis says. That means Oakland could get $1.4 million to $2.1 million from a special production tax set at 3 percent of gross sales, not counting any other sales, utility, business-license and other taxes. Property taxes from the project are estimated at about $281,000 per year. Because the project is in the Coliseum redevelopment project area, these taxes would accrue to the Oakland Redevelopment Agency. The business could create about 371 union jobs, of which a little less than half would be in the grow facility and the rest in the other facets of the business. The average salary would be $53,700, plus benefits.

Assuming the project's total construction and development costs are $17.1 million, the analysis projects an added $8.6 million direct and indirect benefit to the county's economy.

Remember, all of this is for a nonprofit company producing marijuana under the state's existing medical-marijuana law. But what if voters approve Tax Cannabis 2010 in November, and Oakland subsequently exercises its new right to regulate and tax commercial production and sales of marijuana for recreational use?

Already lucrative, a facility like that could be transformed overnight into a gold mine.

"Hypothetically," Wilcox agreed this morning. "We looked at the numbers and I couldn't believe them. "... There's a big cash basis for this."

Wilcox, 49, said he was in commercial construction and real estate until his health forced him to retire. He said he's interested in this for a variety of reasons, including his belief that the current prohibition on nonmedical marijuana is a hypocritical, costly failure that has made it easier for his teenage daughter to get the drug than alcohol. Better regulation will keep it out of kids' hands; legalization will deprive criminals of a key money stream; commercial production will be a job-creating economic boost; and taxation will raise money for local governments, he said, echoing the Tax Cannabis 2010 talking points.

"Anyone can get rich growing a lot of pot, but can we do it legitimately?" he said, venturing that he can if voters approve the measure this November.

"I'm optimistic."

From a blog located here.

 

[Payaso]

Thanks to Lazyman for bringing the above to our attention...

 

[nomaad]

Lazyman originally posted this in another thread... Thanks for making sure it got to the front page.

This article contains some of the most blatant language to date about the money that hangs in the balance here. The veil is off. This guy sits on the steering committee for the bill. Guess which way he's steering it?

Payaso: Of his own money? Or that was the total amount spent on the signature gathering campaign?

 

[Lazyman]

Yeah, Lee has spent 1.3M of his own cash on this campaign, he wouldnt do that unless he was gonna make that back and then some.

I think even if I wasn't a grower, I'd be saddened to see a huge counterculture like weed made corporate and taxed.

 

[Toyot4]

I don't understand how these huge operations are able to operate on a federal level?

 

[Fuzz420]

spend a million and make 100 million, seems like a good investment to me.

 

[Payaso]

This is more than just one of those things that make you go "hmmmmmmmmm."

 

[LolaGal]

did he say UNION JOBS???? for $54 K a year to grow weed with health benefits?

Shazaam! Can I live in California on $54K a year or will I be really poor?

i want a union job with the United Brotherhood of Marijuana Growers.... Union YES!

once we get em hooked on that UNION weed, then we can go on strike and get better salaries...

I want a union job growing weed... sign me up please. But don't expect me to pay for weed Agraweed... I am sticking an oz in my pocket every day when I leave work... heehee


LolaGal sings "I got it one piece at a time, and it didn't cost me a dime...."

 

[kmk420kali]

I believe that when all is said and done....the $$ made, will be astronomically more than they anticipate!!
They are coming up with figures based on the current estimate of Cannabis Users--
But the Truth vs Polls....will be many, many times higher than they anticipate--
Closet Smokers will be able to "Come-Out"--
My current Guesstimate is that at least 25% of us (Under 60) use Cannabis at least once a month--
My basis for this, is that I have been painting ppl's houses for decades...and I have found evidence of it, while painting many ppl's bedrooms...that you would never have guessed might smoke!! I mostly do higher-end work, and it is amazing the percentage that smokes...even if it is hidden in their bedroom...late at night--

 

[Yes4Prop215]

Yeah, Lee has spent 1.3M of his own cash on this campaign, he wouldnt do that unless he was gonna make that back and then some.

I think even if I wasn't a grower, I'd be saddened to see a huge counterculture like weed made corporate and taxed.

exactly, this just makes me facepalm.

thousands of growers and brokers will be out of business just so AgraMed can make their millions.

 

[LolaGal]

Oh boy a union that is full of stoners growing weed. It is a dream I never thought I would live long enough to see.

I can't get over the union job projections... wow... wow...

Agraweed would be powerless if a really good Union was in place. The Union would run the business, or nobody would play at all.

a real union like in the old days, not one of these namby pamby rollover kind.

Can ya'll tell my Daddy had a UMWA job? lol...

 

[localhero]

1.2 i doubt it was only that much. it was on the street at 1 buck a sig, meaning the sub coordinators were getting atleast 35cents above that and then the people above them even more, and the bonuses for the people running it can run into the millions. they needed something like 500,000 sigs to qualify and collected over 700,000.

my experience with this kind of thing is that there is always a hidden agenda, no one would throw down that much of their own money without having an angle. now if it was a conglomeration of different contributers then thats more of a sign that hey this is legit. but definitely a red flag for one dude to monopolize the structure of the proposition, co-opt the cause to garner support and then sneak away loaded.

i need to read up more on whats going on.

 

[LolaGal]

I am currently reading a book on the subject, and it is a interesting issue.

 

[nomaad]

Lola: what book?

Localhero: hidden agenda?! I don't think its that well hidden.

 

[localhero]

yeah youre right not that hidden. i guess i mean like anything you hear that sounds super tasty, like hey make it so that you can take your good driver discount to your next car insurance provider! ends up having some other reality behind it, such as mercury backing that cause. this case is - HEY LEGALIZE MARIJUANA! and everyone only hears that.

im guilty of only hearing that, ive just got caught up my immediate circle lately and neglected staying up on politics.

I have to say this is a very precarious position. i mean a defeat of this proposition could lead to an emboldening of the anti mj people. and harsher restrictions being imposed.

 

[nomaad]

But passing it could weaken MMJ battles in other states where opponents will say that MMJ legislation is a backdoor to legalization.

Not taking a side here... just pointing out that every outcome has its potential pitfalls.

 

[johnnybhang]

The estimate is for a wholesale value of $2800 a pound. This may be an indicator that prices will remain relatively close to what they are now, through mass production in the future. The big businesses that will take over production want those high prices. I dont see prices dropping drastically for indoor. Even through legalization come fall.

 

[localhero]

well there should be a plan of action for either outcome come november.

there is money to be made in this thing and thats always going to lend itself to abuse by those with money and power. are we always victims of elitism or can the spirit of the movement that started it all keep the reigns? im definitely seeing the full legalization in a different light.

i really doubt prices would stay that high, but i dont think theyll plummet either. people will see that this is closer to wine and cigars as far as quality being sought after. that would suck to have some big companies step in and wave back saying, thanks for everything, thanks for paving the way for us to make billions.

 

[ChronJohn]

.

 

[LolaGal]

Well cigarettes are about the same price as marijuana, of course you get more cigarettes in a carton... but still with the price of cigs higher than weed already, legalization should drive the price up as production fails to meet the market demand.

with legal weed, no more drug tests for weed, tons of people will start smoking again that have stopped due to jobs they would like to keep.

with legalization, increased demand for marijuana will make this market explode.

I got 40 acres I could put out when that day comes to do my part.