FortisBC Inc. (FortisBC) Application for a Certificate of Public ...

0.08
Return to
Market
Activities
0.04
R*
tached) is plotted on the “y”-axis; and the “Num-
ber of Grow-ops” is along the vertical axis.
Although not plotted, the value of , the probability
of being busted, like T, is a calculated value.
Estimates of the total
number of grow-ops
applied to the regions of
British Columbia
The most recent characterization of the number of
grow-ops in British Columbia is to be found in
Plecas et al., 2002. For the year 2000 they suggest a
PUBLIC POLICY SOURCES, NUMBER 74
PQ/C 4
3
figure of 2,808 incidents of busted grow-ops in
British Columbia.
We can see the implications of the model by region
if we are willing to go with a particular value
of the rate of return and the value of output relative
to costs. Table 5 takes model 2 in which the
rate of return includes an explicit risk premium,
and uses the value 1.5 for the ratio of the value of
output relative to costs.
Although interesting, because they indicate the
likely scope of the marijuana industry geographically,
yearly variations in table 5 are
The Fraser Institute 17 Marijuana Growth in British Columbia
3
2
1.8
1.6
1.4
1.2
Value of Output to Cost
Appendix BCUC IR1 74.1
Figure 1: Number of Marijuana Grow Operations as a Function
of the Value of Output and Rate of Market Return
20,000
10,000
0
70,000
60,000
50,000
40,000
30,000
Number of Grow Operations