On Sunday, football lovers will witness the first ever “Bud Bowl” celebrating the legalization of marijuana by Colorado and Washington as the Broncos play the Seahawks.
Kismet? Positive chi? Providence?
Call it what you like, these two states have likely paved the way for the relegalization of dope – it became illegal nationwide in 1937 – for the rest of the country.
Here in Colorado, on Jan. 1, retail purchases became a reality.
This simple act put the state on the worldwide map for a day or so – though for many, I’m sure not for the right reasons.
Long-ish term readers of this column may recall that I, like many economists, advocated for the legalization of marijuana way back in 2006 when Colorado voters passed Amendment 44 – six years after legalizing medical marijuana.
And while this allowed people to own up to an ounce of dope, actually buying it remained dodgy. A month into this experiment, how are things going? (Jokes aside about the Rocky Mountain High.)
Let’s begin with tax revenue. According to the Colorado Department of Revenue, total marijuana sales in Colorado for the first quarter of the 2014 fiscal year, July-September 2013, was $109 million, raising about $3 million in tax revenue.
The state is projecting annual revenue of $580 million, generating about $67 million in tax revenue.
Revenue estimates for the first week of January are $5 million with $1.1 million in taxes.
For the local area, which includes La Plata, Montezuma and San Miguel counties, revenue equaled $2.7 million and $77 thousand in taxes.
That’s serious cheese.
While data isn’t yet available on dope tourism, anecdotes abound about Americans coming here to partake.
And the market strikes.
Many dispensaries seemed to have either underestimated weed demand or got greedy and decided to sell whatever they had. The predictable result of demand greater than supply is a rise in prices or rationing – economists prefer the former as rationing creates a shortage.
This undersupply of dope led to a roughly 156 percent divergence between legal and black market prices – pretty substantial. If this price difference remains permanent, there will likely be an expansion of black market marijuana.
In a similar vein, Velveeta cheese is experiencing similar market forces. The so-called “Cheesepocalypse” is due to a product recall, manufacturing lag and the Bud Bowl. That is, declines in supply and increasing demand are leading to a spike in Velveeta prices.
Meanwhile in Seattle, cops at the annual Hempfest in 2013 handed out 1,000 bags of Doritos with some facts about Washington’s new marijuana laws.
So viewers of “Bud Bowl XLVIII” will have an important decision to make: How much Velveeta to put on the Doritos for nachos.
And they better make plenty, at least in Colorado and Washington.
email@example.com. Robert “Tino” Sonora is an associate professor of economics at Fort Lewis College and the director of the Office of Business and Economic Research at Fort Lewis College.