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

So what are the bounds to a measure of retail
value of sales? To answer this we need a measure
of the price of what is sold. Significantly, the unit
in which the marijuana is sold is an important
consideration. From our estimates in table 2 and
the supporting discussion in appendix A, we
know the relationship between price per gram
and quantities sold—be it a fraction of a gram, or
by the kilo, and various quantities in between.
To carry this to the extreme, suppose that the
British Columbia producers’ crop was to be valued
at the per cigarette street cost: the smallest
and most expensive retail unit. Table 8 gives a
sense of the values.
Table 8 reflects the retail value of the product
from each of British Columbia’s regions. The
producers do not, of course, receive these
amounts. Like many agricultural products, the
“middle-man” receives much of the difference
between the final sale price and the original
producer. Transportation, packaging, marketing,
and risk of confiscation by various compet-
PUBLIC POLICY SOURCES, NUMBER 74
Table 8: The Value* of the BC Marijuana Harvest by Region
Measured at “per Cigarette” Values (in millions of dollars)
District 1997 1998 1999 2000
Greater Vancouver 950 1,328 2,319 3,422
Mainland/Southwest 1,224 1,687 2,937 4,222
Vancouver Island/Coast 665 872 1,353 1,333
Thompson/Okanagan 329 515 740 854
Provincial Total 2,497 3,474 5,664 7,156
*The assumptions underlying quantities for this table are the same as those for table 5.
37 There is a substantial marijuana trade with the US.
Appendix BCUC IR1 74.1
itors and law enforcement are all part of the
difference.
Although the values do not reflect the actual receipts
by the growers in each region, the numbers
do reflect an estimate of the contribution to ultimate
street sales made by each region should the
final product be sold at British Columbia retail
prices in British Columbia. Estimating the “true”
street value of the actual product would necessitate
knowing exactly where final consumption
took place: both at home and in the United
States. 37
Although many underground activities have consequences
for society ranging from alcohol prohibition
of the 1920s to drug prohibitions today,
economists have had a difficult time in describing
the extent of production. The British Columbia
marijuana industry is a good place to begin to
study this problem. While decentralized, the
characteristics of the grow-ops are relatively well
known, and there is a considerable volume of
product, much of which heads to the US.
The Fraser Institute 21 Marijuana Growth in British Columbia