Motley Fool Money Weed Economics 101
Jun 4, 2022
Robin Goldstein, an economist at UC Davis and co-author of 'Can Legal Weed Win?', dives into the engaging world of weed economics. He discusses the impact of federal legalization on investors and reveals surprising parallels between weed and bacon. The conversation explores price elasticity and consumer behavior in varying state regulations, particularly in California and Oklahoma. Goldstein also addresses the challenges of investing in legal cannabis and highlights how marketing shapes consumer perceptions in this unique market.
AI Snips
Chapters
Books
Transcript
Episode notes
Weed Economics: A Unique Market Dynamic
- The economics of weed are interesting due to the struggle between legal and illegal markets.
- This dynamic is unique and provides valuable insights into consumer behavior and public policy.
Price Elasticity of Weed vs. Bacon
- Weed's price elasticity is similar to bacon, as demand remains relatively constant despite price changes.
- However, unlike bacon, legal weed faces close substitutes from the illegal market, posing a challenge for businesses.
Elasticity of Legal vs. Illegal Weed
- Overall weed demand is inelastic, with regular smokers largely unaffected by minor price fluctuations.
- However, the substitution between legal and illegal weed is highly elastic, driven by price differences.
