A crackdown by federal prosecutors is casting a long shadow over the state’s marijuana industry, but there is one bright spot, at least for some Northern California growers willing to risk prison time: Wholesale prices appear to be on the rise.
After slumping precipitously, prices for a pound of high-grade, outdoor-grown marijuana are stabilizing and in some areas are up between 20 and 40 percent, according to interviews with growers, law enforcement agents and analysts.
“It’s been a downward thrust since 1996, but this year, prices have been up,” said Kym Kemp, a Humboldt-based blogger who closely follows Northern California’s marijuana scene.
“People are saying, ‘Maybe this isn’t our last season,’ ” she said. “I don’t think people are ready to be optimistic, but they’re less depressed.”
In recent years, California’s booming medical marijuana industry attracted a rush of new players who harvested increasingly large amounts of pot – for storefront dispensaries and the black market. Some longtime operators responded by also “growing big.”
Surging production pushed down prices for some strains to less than $1,000 per pound. This led more growers to illegally ship their marijuana out of state, where they can double or triple their profits.
But this year, production levels have dropped, in part because of rainy weather and a “bumper crop of mold,” said medical marijuana grower and activist Charley Custer. “It was a perfect storm,” he said.
It wasn’t just the weather. Stepped-up enforcement actions by local and federal law enforcement led some growers to lay low and reduce their plant counts to double digits.
“Some growers decided to keep it small this year,” said Dale Gieringer, state director for the National Organization for the Reform of Marijuana Laws.
With marijuana supplies under pressure, prices responded as they would with any other commodity.