U.S. marijuana legalization threatening health of lucrative B.C. bud business

Medical marijuana is shown in a jar at The Joint Cooperative in Seattle, Washington January 27, 2012. REUTERS/Cliff DesPeaux

The B.C. marijuana business, which some believe is the most lucrative industry in the province, is apparently feeling the pinch from the neighbouring state of Washington's decision to legalize pot.

B.C. pot advocates, who are trying to force a referendum that would effectively decriminalize the drug in the province, told the Globe and Mail that pot prices are dropping, cutting into producers' revenues.

Citizens of Washington and Colorado voted last year to decriminalize the possession, cultivation and regulated sale of marijuana. Washington's business-licensing service started taking applications this week from those who want to get into the pot business, the Globe said.

The move has already had an impact north of the border, where the B.C. industry is estimated to be worth more than $4 billion, pot advocate Dana Larsen told the Globe.

“Prices are going down in British Columbia,” said Larsen, who opened a legal Vancouver medical marijuana dispensary and is a leader with Sensible BC, the drive to collect enough signatures for a referendum.

The Sensible B.C. campaign, launched Sept. 9, has three months to collect 400,000 names to force a referendum under B.C. law requiring the government to instruct police not to arrest citizens for simple pot possession. The proposal is essentially a way around the Criminal Code and the Conservative government's tough-on-drugs stance.

[ Related: Pro-marijuana petition faces uphill battle in B.C. ]

Larsen said prices at his dispensary have dropped about 20 per cent to about seven dollars a gram, a trend mirrored elsewhere in the province.

The growing availability of medical marijuana in a number of U.S. states has also cut into exports, he said.

“They’ve got their own supply in Washington, so there’s less demand for B.C. bud," Larsen told the Globe.

"And [for sellers] here, there’s less demand for our product in the states and so prices drop locally as people try to move their product. And I expect they’re going to stay in the range that they are, if not continue to go down."

Pot advocate Jodie Emery, whose husband Marc is in a U.S. federal prison for selling marijuana seeds into the states by mail-order, agreed demand for once prized B.C. bud is down.

“We’ve seen that the production of marijuana is increasing in the United States, so the demand for B.C. bud has been dropping,” Emery who publishes Cannabis Culture magazine and operates a store, told the Globe.

[ Related: Is it time to consider taxing and regulating marijuana? ]

Emery said B.C. bud used to sell four about $2,000 a pound but has heard the price now is down to about $1,000.

The growing legal market for pot in Washington is even attracting Canadians. Local residents like Daniel Curylo of Sardis, B.C. are moving to Washington and applying for business licences to become pot producers and processors.

B.C. is losing ground because the government hasn't embraced the industry, Curylo told the Globe.

It's not clear whether prices have declined east of the Rockies. Certainly it seems like business as usual, based on a report this week that a marijuana grow-op was found inside a New Brunswick seniors home.

The provincial Opposition Liberals are demanding an independent review of inspection policies after police turned up the hydroponic operation in the basement of the facility last Friday following a fire, The Canadian Press reported.

A search revealed 550 pot plans and growing equipment in the facility. Liberal social development critic Victor Boudreau wants an explanation how such a large grow-op could remain undetected in the special-care home.

Social Development Minister Madeleine Dube wouldn't comment directly on the case, citing the criminal investigation, but said there's a rigorous inspection system, including spot checks.