RJA - The Unintended Consequences Of The Marijuana Revolution - Food Shortages And Higher Prices
https://seekingalpha.com/article/4087074-unin...her-prices
Summary
Demand for pot is soaring in states that legalized recreational use.
Grow houses are popping up all over the place, and it won’t be long until traditional farmer’s get into the act.
Global demand for food continues to climb, and prices are sensitive to supplies.
Pot versus grains - An economic no-brainer for the farmer.
As acceptance spreads a hedgingmechanism for price will become necessary.
Until 1996, marijuana was nothing more than an illegal drug in the same category as many other opiates and other narcotics. While pot has been part of the social fabric for many decades, the fact is that pot remained underground as it gained in popularity starting in the 1950s. In the United States pot was an illegal substance, but in countries like Holland marijuana was legal for both medical and recreational use. In 1996, California became the first state in the U.S. to legalize pot for medicinal use, and since then many other states have followed suit. In 2017, medical pot is legal in 29 states and recreational in five. On July 1, 2017, dispensaries in the state of Nevada followed Colorado and are now selling pot for recreational use. Demand in Las Vegas has been so high for the first week of legalization that many dispensaries are worried they will run short of supplies.
While there are still questions about the differences between Federal and State laws when it comes to the sale of marijuana, the trend of legalization appears too strong to stop at this point, and it will not be long before the weed is available for both medical and recreational use in all fifty states. From the States perspective, the potential tax revenue from sales of the weed come at a time where municipalities are in desperate need of funding. On the Federal front, it is becoming more difficult for the U.S. government to stand in front of the will of voters and States’ rights. Given the buoyant demand for pot and its price, marijuana is fast becoming the most popular agricultural product, and that could result in some unintended consequences in the years to come.
Demand for pot is soaring in states that legalized recreational use
On July 1, marijuana became legal in Nevada for personal use, and the lines at dispensaries have been long. Since the November election, the number of grow houses have increased notably around the Las Vegas area, and industrial real estate lease rates have reflected the increasing need for facilities to grow pot to meet demand. Colorado ran into the same issues when they legalized weed a few short years ago.
The fact is that marijuana has been one of the biggest agricultural businesses in the United States for decades, but until recently all of the revenues have wound up in the hands of drug dealers and cartels. Now, not only will legitimate tax paying businesses reap the rewards of the marijuana business but municipalities will increase their tax revenue base because of the hefty sales premiums levied by local and state governments.
Grow houses are popping up all over the place, and it won’t be long until traditional farmer’s get into the act
I live in Clark County, Nevada and since the November election when the marijuana referendum passed, the number of grow houses along I-15 near the strip has exploded. Many of the now current business establishments were just abandoned industrial space or warehouse facilities, and the revenue receipts were small. Today, these facilities not only employ staff to grow and tend the pot plants but also have created hundreds of jobs when it comes to security and logistics of transporting the marijuana to dispensaries around the area and collecting the cash receipts. At the same time, many new business establishments that provide the items necessary to grow pot have sprung up. Fertilizers, lighting, and other agricultural services for the pot industry have been the fastest growing businesses in Nevada and other States that have legalized pot. At the same time, the pot grow indoors requires lots of electricity and utilities have seen their revenues grow. Warren Buffet owned NV Energy, the power company. I am quite sure that Mr. Buffet is profiting handsomely from the increased use of power in the grow houses all over Las Vegas and the rest of the state.
Grow houses are popping up all over the place and with demand booming and the limited number of licensed sellers experiencing substantial and increasing demand it will not be long until the indoor facilities give way to fields of pot in areas of the United States. Growing the weed outdoors in fertile soil in regions with the appropriate weather conditions will create a new agricultural revolution in the United States for many traditional farmers.
Global demand for food continues to climb
A drought across the fertile Plains of the United States and around the world in 2012 caused the prices of corn and soybeans to soar to record highs. Wheat traded at the second highest level in history during that year. However, in the four following years, bumper crops caused prices to fall to over half the levels seen during the drought year, and farmers suffered economic hardship.
The world has become accustomed to bumper crops of agricultural commodities each year as population growth creates more mouths to feed around the globe each day. Each quarter, there are approximately 20 million more people on our planet which mean that since the last drought in 2012, the population has grown by around 400 million inhabitants. In the monthly World Agricultural Supply and Demand Estimates report, the U.S. Department of Agriculture has repeatedly highlighted growing demand for grains. While inventories have increased to record levels over recent years, demand has steadily accelerated.
Most recently, poor weather conditions in the Dakotas and Montana has caused a sharp increase in the price of wheat and corn, and soybean prices have followed. The latest rally in grains began at the end of June and only a few weeks later, prices have soared.
https://seekingalpha.com/article/4087074-unin...her-prices
Summary
Demand for pot is soaring in states that legalized recreational use.
Grow houses are popping up all over the place, and it won’t be long until traditional farmer’s get into the act.
Global demand for food continues to climb, and prices are sensitive to supplies.
Pot versus grains - An economic no-brainer for the farmer.
As acceptance spreads a hedgingmechanism for price will become necessary.
Until 1996, marijuana was nothing more than an illegal drug in the same category as many other opiates and other narcotics. While pot has been part of the social fabric for many decades, the fact is that pot remained underground as it gained in popularity starting in the 1950s. In the United States pot was an illegal substance, but in countries like Holland marijuana was legal for both medical and recreational use. In 1996, California became the first state in the U.S. to legalize pot for medicinal use, and since then many other states have followed suit. In 2017, medical pot is legal in 29 states and recreational in five. On July 1, 2017, dispensaries in the state of Nevada followed Colorado and are now selling pot for recreational use. Demand in Las Vegas has been so high for the first week of legalization that many dispensaries are worried they will run short of supplies.
While there are still questions about the differences between Federal and State laws when it comes to the sale of marijuana, the trend of legalization appears too strong to stop at this point, and it will not be long before the weed is available for both medical and recreational use in all fifty states. From the States perspective, the potential tax revenue from sales of the weed come at a time where municipalities are in desperate need of funding. On the Federal front, it is becoming more difficult for the U.S. government to stand in front of the will of voters and States’ rights. Given the buoyant demand for pot and its price, marijuana is fast becoming the most popular agricultural product, and that could result in some unintended consequences in the years to come.
Demand for pot is soaring in states that legalized recreational use
On July 1, marijuana became legal in Nevada for personal use, and the lines at dispensaries have been long. Since the November election, the number of grow houses have increased notably around the Las Vegas area, and industrial real estate lease rates have reflected the increasing need for facilities to grow pot to meet demand. Colorado ran into the same issues when they legalized weed a few short years ago.
The fact is that marijuana has been one of the biggest agricultural businesses in the United States for decades, but until recently all of the revenues have wound up in the hands of drug dealers and cartels. Now, not only will legitimate tax paying businesses reap the rewards of the marijuana business but municipalities will increase their tax revenue base because of the hefty sales premiums levied by local and state governments.
Grow houses are popping up all over the place, and it won’t be long until traditional farmer’s get into the act
I live in Clark County, Nevada and since the November election when the marijuana referendum passed, the number of grow houses along I-15 near the strip has exploded. Many of the now current business establishments were just abandoned industrial space or warehouse facilities, and the revenue receipts were small. Today, these facilities not only employ staff to grow and tend the pot plants but also have created hundreds of jobs when it comes to security and logistics of transporting the marijuana to dispensaries around the area and collecting the cash receipts. At the same time, many new business establishments that provide the items necessary to grow pot have sprung up. Fertilizers, lighting, and other agricultural services for the pot industry have been the fastest growing businesses in Nevada and other States that have legalized pot. At the same time, the pot grow indoors requires lots of electricity and utilities have seen their revenues grow. Warren Buffet owned NV Energy, the power company. I am quite sure that Mr. Buffet is profiting handsomely from the increased use of power in the grow houses all over Las Vegas and the rest of the state.
Grow houses are popping up all over the place and with demand booming and the limited number of licensed sellers experiencing substantial and increasing demand it will not be long until the indoor facilities give way to fields of pot in areas of the United States. Growing the weed outdoors in fertile soil in regions with the appropriate weather conditions will create a new agricultural revolution in the United States for many traditional farmers.
Global demand for food continues to climb
A drought across the fertile Plains of the United States and around the world in 2012 caused the prices of corn and soybeans to soar to record highs. Wheat traded at the second highest level in history during that year. However, in the four following years, bumper crops caused prices to fall to over half the levels seen during the drought year, and farmers suffered economic hardship.
The world has become accustomed to bumper crops of agricultural commodities each year as population growth creates more mouths to feed around the globe each day. Each quarter, there are approximately 20 million more people on our planet which mean that since the last drought in 2012, the population has grown by around 400 million inhabitants. In the monthly World Agricultural Supply and Demand Estimates report, the U.S. Department of Agriculture has repeatedly highlighted growing demand for grains. While inventories have increased to record levels over recent years, demand has steadily accelerated.
Most recently, poor weather conditions in the Dakotas and Montana has caused a sharp increase in the price of wheat and corn, and soybean prices have followed. The latest rally in grains began at the end of June and only a few weeks later, prices have soared.
