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The downside of selling marijuana for $1 a gram
Uruguay is trying to undercut the competition — i.e. drug traffickers — in its new weed utopia. But cheap pot has consequences...
Legal? In Uruguay. Cheap? Definitely. Good? To be determined.
Legal? In Uruguay. Cheap? Definitely. Good? To be determined. (AP Photo/Matilde Campodonico)
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mericans aren't the only ones embracing the idea of legalizing marijuana. In August, the lower house of Uruguay's national legislature approved a groundbreaking law that would fully legalize marijuana, so long as it is grown at home or cannabis co-ops, or purchased at government-run markets. President Jose Mujica is expected to push it thorough the Senate, where his party has a solid majority, and sign it in November.

This week, Uruguay's drug czar — a very different job than in the U.S. — unveiled his target price for the state-run pot markets: $1 a gram. A gram is enough for one large joint or two small ones. Government sales are expected to start in the second half of 2014.

A dollar a gram, or $28 an ounce, is ridiculously cheap compared to the legal (and most illegal) markets in the U.S. and Europe — at U.S. medical marijuana dispensaries, prices are typically $8 to $14 per gram; recreational pot is generally more expensive. But Uruguay's price is only a slight discount from the going rate on the country's street, where dealers reportedly sell a gram for about $1.40. Still, a discount is a discount, and if the $1/gram plan becomes law, it will be bad news for narcotraffickers.

That's the point, says Julio Calzada, Uruguay's drug policy chief. Illegal marijuana is "very risky and bad quality," he told Uruguay's El País newspaper. The government-run markets are going to "provide a safe place to buy, a high-quality product, and, on top of that, they're going to sell it at the same price." The state isn't in this to make money, he adds.

So, primo pot purchased legally for about $3.50 an eighth, plus driving criminal drug traffickers out of business to boot — what's not to like?

First of all, the same arguments against legalizing marijuana apply to selling it on the cheap. The biggest concern about legalizing weed is that there will be "a big upsurge in heavy use, and that worry would be exacerbated to the extent that the growth in heavy use is among juveniles," says Mark Kleiman at The Reality-Based Community. "If cannabis prices are allowed to fall to something like their free-market levels, a very large increase in heavy use would be the likely result."

Uruguay is planning to manipulate the market downward with price caps. Even at today's inflated U.S. market prices, pot is "a remarkably cheap intoxicant" — less expensive than alcohol, Kleiman says. And prices will drop a lot more once the risk of being busted evaporates and mass production kicks in. If anything, states and countries with legal marijuana should tax recreational purpose fairly heavily, he adds. Anyone worried that pot is too expensive "is spending far too much time stoned."

The second problem is quality. You can already get pot for $2 or $3 a gram in the U.S. — "the product is called Mexican schwagg... mostly seeds and stems, state of the art circa 1974," a Washington State pot grower tells The Dish's Andrew Sullivan. You can mass-produce marijuana to bring down prices, but factory-farming pot won't make demanding smokers very happy.

Marijuana... has trichomes, which break with handling; they're fragile; they taste bad when grown poorly and keeping them in the good condition discerning buyers expect takes some work and skill. Nice flowers command the price they do because of the labor involved. Demand is high because most growers aren't very good at it.... Big factory grows (which already exist and supply the medical market) will probably have the same problems they already have in their quest to equal the quality of smaller ma-and-pa farms. Budweiser doesn't make an India Pale Ale. [The Dish]

If the price of legal pot is too high, drug traffickers will be able to sell it for cheaper on the black market. But with legal prices capped at $1 a gram, a new black market for super-kind bud could emerge. Yuppie stoners would still run afoul of the law.

"I haven't ever smoked Uruguay marijuana, so I'm not sure how good it is," says the pseudonymous Johnny Green at The Weed Blog. "But if it's as good as medium grade sun grown marijuana in Southern Oregon or better, that would be an amazing deal. If it's for schwag, that's actually a bit of a price gouge."

There's one more problem with $1-a-gram marijuana: The only people who can buy it are residents of Uruguay. That "should be a boon for Uruguayans concerned about pot tourism," says Jess Remington at Reason, but "a disappointing drawback for said potential pot tourists."

Peter Weber is a senior editor at TheWeek.com, and has handled the editorial night shift since 2008. A graduate of Northwestern University, Peter has worked at Facts on File and The New York Times Magazine. He speaks Spanish and Italian, and plays in an Austin rock band.

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