The weak US dollar is hurting foreign exporters, that includes drug traffickers

[lulz]

High Canadian Dollar Hurts Sales Of Premium BC Pot In US



WHITEFISH — For years, backpacks crammed with cash have slipped north into Canada, followed closely by hockey bags packed with premium marijuana skating south into Montana.

A favorable exchange rate (not long ago, one American dollar bought one and a half Canadian dollars) made the smuggling profitable, and thus popular.

But last month, for the first time in more than 30 years, the two currencies were at par, matched in value, and Sunday a Canadian dollar bought $1.06 U.S.

The financial tables have turned, and global economics have done what U.S. law enforcement could not: Capitalism has stopped the smugglers in their tracks.

Call it Marijuanomics 101.

America borrows itself deep into the hole, ratchets up its trade deficits, buries itself beneath subprime mortgage debt, devalues its dollar with interest-rate cuts, and the currency plunges.

Meanwhile, Canada’s economy booms on oil, foreign investors turn north for stability, and the “Loonie” — Canada’s dollar, named for the bird on the coin — hits a 50-year high.

Suddenly, it’s far more expensive to buy Canadian exports, legal or otherwise, and smuggling profits disappear.

“It’s very simple,” said Stephen Easton, professor of economics at Simon Fraser University in Vancouver, B.C. “Canadian marijuana production costs are met in Canadian dollars, and those are worth more now.”

Previously, he said, pot growers could produce a pound of potent “B.C. bud” for about $2,000 Canadian and, with the exchange rate, smugglers buying with U.S. currency could sell it for a hefty profit south of the border. In those days, an American dollar in Canada was like a 50 percent discount card, and there’s nothing like a wholesale discount to bolster retail profits.

Production costs remain in the range of $2,000 Canadian, Easton said. But with the currencies at par, the profit margin is completely gone, unless Montanans are willing to pay 50 percent more for the prime northern bud. A smuggler’s risks and transport costs are no longer offset by profit.

“The upshot is that the Canadian marijuana is now less competitive against marijuana grown elsewhere,” Easton said. “This is a cost-driven business. With exports no longer viable, the British Columbia marijuana industry has certainly taken a hit, so to speak.”

As has green-bud availability for Big Sky pot smokers. Although Canadian pot only accounts for perhaps 3 percent of all marijuana in the American market, it commands a strong presence in border states such as Montana.

“Sure, I’ve known people who have brought it down and made a pretty good living,” said Bradford Moore, who owns the Heads Up pipe shop north of Kalispell. “I won’t deny it. They’d go up there, buy it on the Canadian dollar, bring it back and make a nice profit. Let’s be honest — that Canadian border is wide open.”

As in: 5,500 miles of border land, much of it rugged and remote, and perhaps 1,000 agents sharing patrol duties.

These days, though, hardly any Canadian-grown marijuana crosses the border, because it just doesn’t pay.

And Easton predicts things will get worse before they get better for those on both sides of the illegal industry, because without exports, Canada’s pot crop will swamp the domestic market and prices there will plummet. (One British Columbia grower predicts “a great glut of pot” due to the loss of export markets.)

That’s a very big deal for a province that, unofficially at least, counts marijuana exports as a major economic contributor. Back in 2000, Easton and his university colleagues published a study he says estimated the annual market value of British Columbia’s pot at around $5 billion, with perhaps 90 percent of the crop shipped south into the U.S.

http://www.badcyclopedia.com/high-ca...-bc-pot-in-us/


The article kind of rambles on for a while longer, seems like the writer smoked a joint halfway through. One observation it makes though is that this will probably kill of some of the large-scale operators that have dominated the market, and make room for small growers to come in.

Have people in the US noticed the price of drugs increasing? Or have people in Canada seen the price of weed fall yet? Please don't say any actual prices (against the rules), but saying "10% increase" or something should be OK.

I'd imagine that drugs like meth or ecstasy haven't seen much price change since they can be produced domestically, but coke and heroin probably have become more expensive since they have to be imported.

The dollar is most likely going to keep on falling, so the consequences haven't played out yet. It'll be interesting to see the results...