Farmers must go to Market: SF Bay Area’s potential $200 Million+ Cannabis Market

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Photo via wikipedia.com commons

In the Golden State, weed is a big deal. As the state embraces legal weed, there are going to be some big changes – a new set of rules for those who wish to make the leap from under-the-table to aboveboard. One definite change will be buyers – i.e. whom can buy and sell weed.

Nowadays, the way it’s supposed to work is farmers provide medicine to collectives where it is dispensed to members for a fee. The farmer is reimbursed for expenses incurred from growing the cannabis including labor, maintenance, and land costs. For years the process has been unspoken, a secret, or you know (wink)?

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Proof of origin re: Humboldt. Sticker top left of packages. Screen shot @emeraldfamilyfarms via Instagram

The way it will work once a regulatory body (MMRSA and BMMR; AUMA?) is established and fully implemented is a topic of many conversations and still very much a question mark. One truth: it will be legal for growers, buyers, and sellers to make profit. They will also have to pay taxes and fees. Another truth: no cannabis flowers or products will be sold over state lines. We can assume that farmers will have to sell to individuals who obtain a dispensary license from the state. They will do this either directly or via middlemen, or transporters, but all flowers and products must go through dispensaries (and distributors) before being purchased by consumers. Products will be tracked and traced, Humboldt County already has implemented a proof of origin program complete with a foil sticker and QR code.

We can also assume that cannabis grown in Emerald Triangle will not solely be consumed within the three counties. Most would agree that cannabis is so prevalent in the region that many will not pay for weed. In order to find demand for Emerald’s cannabis, that meets or exceeds supply, farmers must sell their product outside of the region. And, as mentioned, that product mustn’t cross state lines.

So where does this leave cannabis farmers in Humboldt, Mendo, and Trinity Counties. Where will they sell their weed? Its safe to say that most consumers will not make the trek up Highway 101 and 5 to get their stash (although this might happen more often as cannabis legalizes). Farmers must get their product to consumers. It’s the old adage: the farmer must go to market. But don’t fret; good news waits…

According to a recently released study originally reported by the Washington Post: “the Bay Area is home to the highest concentration of marijuana smokers anywhere in the country.” Data shows that 15% of the Bay Area’s 7.65 million people use cannabis on a monthly basis or more. That’s double the 7% nation wide average. Oh, not to mention its also one of the richest places in the world. If the nine counties that make up the SF Bay Area formed a country its GDP would rank 19th in the world at $785.5 billion.

Doing some easy – and less than academic – number crunching, we can see the potential of the Bay Area’s demand for cannabis.

Utilizing the 15% from the study reported by the Washington Post, we can deduce that roughly 1.15 million people consume cannabis on a monthly basis or more in the Bay Area. Conservatively, if each of these individuals is consuming one gram a month, that would put the Bay’s monthly consumption at 1.15 million grams. Lets say the average retail price of a gram is $15 dollars, that would mean the Bay spends $17.2 million per month on weed. Multiply that by 12 months and we can estimate that the Bay Area spends $200+ million on weed a year. Again, that’s conservative; some surely smoke over an ounce and spend over $15 a month on cannabis. This also doesn’t account for tourist and out-of-towners alike. California’s cannabis market is estimated to be worth over $6 billion. The Bay Area could pull in over a billion dollars a year once legal sales start rolling. Through this little exercise we can see how important the Bay Area is as the biggest nearest legal cannabis market to Emerald Triangle cannabis farmers.

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Mother Jones article re: Flow Kana out of Mendo

Other variables also exist, not everyone will automatically begin to buy their weed aboveboard once given the opportunity via legalization etc. It’s also unclear how new laws and regulation will affect the future of California legal cannabis industry. But one thing is certain, it’s important to market Emerald, Humboldt, Mendo, and Trinity weed to the SF Bay. Groups such as Flow Kana have already done so.

Perhaps Emerald farmers should join forces and market the cannabis from the region much like California’s dairy industry. After all: great milk comes from happy cows and happy cows come from California. Or…

Chronic ganja comes from happy plants and happy plants come from the Emerald Triangle!;)

Ed

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