“25 To Stay Alive”

Or to be nipped in the bud.

At first glance the thin, hand-cut, flyers fluttering in the breeze on the Garberville bulletin board appeared to be a speed limit reference. I had to put on my reading glasses to read the fine print which, to most people, reads like gibberish but to any pot-industry local is obvious code for wholesale marijuana pricing.

Join the growing movement of folks committed to unity and ethical practices within the industry. Stop accepting undercutting. Together we set the ticket. Make the commitment. As of October 2013, accept nothing less than 25. (In D 28+)

Together we prosper. In D and Out D unite. Respectful exchange not hustle. And No, not everyone gets a bill.
Find us on FB and spread the word.

Below the text, “5/1” and a small, penciled-in arrow point to “FB”, presumably the date when the Facebook page will be online.
[edit: as of this evening, 5/1, there’s no mention on Facebook, but keep a lookout for it.]
Let me decipher:

• industry = marijuana industry.
• 25 = $2500 that will be paid for a pound of dried, processed pot.
• In D = indoor-grown/indoor growers; Out D = outdoor grown/outdoor growers.
• As for not everyone gets a bill, I have no idea what that means.

[edit: it means the same as a “point”, i.e. $100 per pound that everyone gets who handles a pound in the distro chain.]
They’re basically asking indoor growers and outdoor growers to agree to not sell wholesale pounds of weed for under $2500 per pound, come this fall’s outdoor harvest.

Here’s a brief background on the sitution. When I got here in ’95, outdoor pounds sold easily for $4K/lb. and you could get up to “45” if you had the right pot and the right market. That was down from the highs of the late ’80s when many people tell me it was over $5K/lb due to the intensity of law enforcement pressure and a lock on much of the nation’s pot market. Law enforcement priorities shifted in 1996 with the passage of Proposition 215, which legalized medical marijuana use for Californians, allowing for a statewide increase in production. This, with increasing production in other states, resulted in a steady  but relatively tolerable decline in wholesale prices.

By 2007 prices were in the high 2s. The crash of 2008 spared no one, as people across the country had less money to spend on Humboldt weed. The price of a pound of pot in Garberville or Weaverville or Laytonville dropped below $2K for the first time ever, then kept going. By spring of 2010, people were selling for as low as $1600 and that dropped even lower by the time the harvest flood hit the market in October.

Since then, the price seems to have stabilized at around $1400-$1600/lb. It’ll likely “bump” up to $2K in the next two months in the gap between when supply dries up and the light-deps come in. At least a lot of people hope there will be a bump. Many people seem to be sitting on their weed, playing chicken with the market.

The reasons for pot farmers selling cheaply are many, but mostly have to do with poor money management, getting way in over their heads on big startup operations and having more weed then they can imagine what to do with.

That’s part of the problem with so many new mega-grows. If you grow 1,000 lbs. of weed, the difference between $1500/lb and $1100/lb is $400,000, but at $1100/lb you’re still grossing over a million bucks. Why should buyers pay some small, organic, community-minded grower a high price when some desperate huge operation will sell for much less? I’m vastly simplifying here, but that’s the gist of it.

Also, historically, indoor growers, who have higher production costs, have criticized outdoor growers for selling too cheaply. Hence the “In D and Out D unite” plea on the flyer.

What the “25 To Stay Alive” people are suggesting is that all growers not undercut each other this way and unite on a bottom line of “25”.

Good luck with that.

It’s a matter of too much, too late. While the profit margins of many buyers (who have lucrative Midwest, South or East Coast markets) could support a price that high, most buyers would probably start looking elsewhere. Norcal no longer has the lock on production it had back in the ’70s through mid-’90s. Those days are gone forever.

While the price solidarity the flyer suggests would benefit the entire local economy, I think it has to be realistic and has to be much bigger than Humboldt or the Emerald Triangle to be effective. At bare minimum, growers shouldn’t dump their weed at below going rate out of fear that they’ll get stuck with it or because they’re desperate to pay bills. That’s where the serious undercutting happens. Maybe the Chamber Of Commerce should offer cash-flow management classes for growers.

The one thing growers may be able to cash in on in the modern market is the “Humboldt brand”. Amidst all the recent, terrible press Humboldt has been receiving because of the actions of a small percentage of irresponsible growers (and always-irresponsible public-lands trespass growers), there is a growing movement to create a Humboldt standard or certification that would ensure branded weed had been grown with the highest environmental standards in mind. Ideally, that would create a high demand for a limited product, helping to keep prices at a level that will support families in the hills of the North Coast. That’s another post, though. It will be interesting to see if 25 To Stay Alive gets any traction in the coming months. I’ll look forward to their Facebook page. Wonder how many “likes” their plea for higher prices will get from pot smokers?