2014-03-21

Co.Exist

How Much Will A Pack Of Joints Cost? The Future Of Mass Market Marijuana

As the weed business becomes legal in more and more states, don't be surprised to see big tobacco turn into big marijuana. But how much will they charge you?

Since the legalization of marijuana in Colorado and Washington, several articles have circulated suggesting that Marlboro would soon be getting in on the weed selling business. This was all started, it appears by an article in Abril Uno (April 1st in Spanish), a satire publication. These claims—unsurpisingly, given the source—seem to be false. But it does makes one wonder: What would a pack of Marlboro Mary Janes cost?

I spoke with Jeff Caldwell, a representative of Altria, the parent company of Philip Morris, which makes Marlboro Cigarettes, and he stated that because the selling of marijuana is illegal at the federal level, their "companies have no plans to sell marijuana-based products." He also didn’t seem too keen on speculating on such possibilities.

But Marlboro is in the business of making money, so it seems likely they would want to get in on such a large market. According to a 2010 paper, the business could yield more than $20 billion a year in just tax revenues. Imagine what it could yield for a company mass marketing joints.

In June of 2013, a company named BOTEC speculated that the production cost of marijuana ranges from $2 to $3 per gram, which "implies a price to retailers of $6.25, which is broadly consistent with current access points paying about $5 per gram." The average Marlboro cigarette has just under one gram of tobacco in each of the 20 cigarettes contained in a pack. So at the low end of things, you’re looking at a production cost of nearly $40 per pack of Mary Janes.

In the current weed economy, successful companies like Medicine Man in Denver are selling 20 pre-rolled, one-gram joints for $120. Medicine Man produces high-quality products, though, and the company is not anywhere close to the size of Marlboro. But production cost also does not factor in what the company must charge to make a profit. The Economics of Smoking, written in 1992, declared that production costs are often half of what cigarette companies wholesale their product for, so what costs a large corporation $40 per pack could result in a $70 or $80 retail price.

The cost of a pack could be brought down by the massive economies of scale a company like Marlboro would bring to the market. You also might not need a whole gram of marijuana in every cigarette—a little can go a lot farther than a gram of tobacco. Another solution: mix the marijuana with tobacco.

If marijuana cigarettes were to be mixed with tobacco, at a 50-50 ratio, it would bring the cost down significantly. Many tobacco farmers will wholesale a pound of their product for less than $2. With a 50-50 ratio of marijuana to tobacco, the cost of producing a pack of 20 pre-rolled joints could be brought down to just a little more than $20—so a $40 pack at the store.

It isn’t as easy as it seems, though. The government has a vested interest in producing income from the selling of marijuana. In Colorado, the law that voted in marijuana brought with it a 25% tax. The tax includes 15% excise and 10% sales tax. Marlboro Cigarette companies are very familiar with the excise tax. Philip Morris’s website explicitly states their opposition to the current excise tax—taxes on products that aren't good for society—writing: "Between 2000 and 2012, federal and state cigarette excise tax rates were raised more than 120 times, more than doubling the price of a pack of cigarettes."

According to Philip Morris, the price of a pack of cigarettes is merely $2.60 after production cost and company revenue, before the 55% of the price that goes to the government. Cigarette taxes are often increased locally to deter smoking, but smoking kills in ways that marijuana doesn't. The tax would likely be closer to 50% if the marijuana was mixed with tobacco, or closer to the 25% we see today in Colorado if the product was solely marijuana.

The bottom line is a pack of purely marijuana cigarettes is going to run you at least $50, and a pack of marijuana-tobacco mixed cigarettes could be as affordable as $20. The mixed cigarettes would cost less to produce, but since they include tobacco, the states would likely tax them around twice as much as if they didn’t.

We don’t know the price of a pack of "Marlboro Ms" to the cent, but it seems they would be around 10 times as expensive as normal cigarettes. With Altria’s recent acquisition of Green Smoke, an e-cigarette company, they may just be finding a way to circumvent the legal issues. E-cigarettes, like those made by Green Smoke, are now regularly used as a way to consume marijuana, and it frees up Altria from having to get involved with the growing or selling of semi-illicit products itself. They may not be ready to open the gates to the farms yet, but they seem to be keeping their eye on the industry. It may be some time before you’re smoking a mass-produced marijuana cigarette, but it won’t be long before you could be smoking marijuana out of something produced by Marlboro.

[Image: Smoking joint via Shutterstock]

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25 Comments

  • Anna DN

    It was obviously fake, however, this is exactly what would get marijuana passed tomorrow, if it did happen. When Big Corporations start to really see the money, the light bulb will go off, and they'll realize they aren't getting their cut of the pie. Once that happens the lobbyists would go to work, and it's a done deal. If anything, there's the opposite happening from big pharmacy. You can bet that Big Pharm has it's DC lobby working hard to prevent the reclassification of Pot from a schedule 1 drug, as well as keeping the FDA's noses out of it so they can keep killing you with their meds, and keep you from natures. ChemicalAmount (per cigarette)Acetaldehyde980 micrograms to 1.37 milligramsAcrylonitrileformerly 1 to 2 milligrams. This product was used as a fumigant in tobacco. Its use has since been discontinued.4-Aminobiphenyl0.2 to 23 nanogramso-Anisidine Source: http://www.cigs4us.biz/tobacco-info Everything you just listed is created when the tobacco burns. I am not an idiot.

  • Michael Lemen

    That's just a little more expensive than cigarettes, a lot more fun and a lot less harmful . Think of how much inflation ( and greed ) affected the cost of pot. The first time I bough pot 1971 a pound was a LOT cheaper than a ounce is now !

  • Jake Tompson

    No it's also standard in Australia as well, we call it spin. It makes it last longer, helps it burn and you don't need much, I'd say 1/3 of a cigarette per 1 gram, but it dose change the taste. I'm completely used to it, the prices over here are $25 AUD / 1.5g as the smallest standard sizing. So I don't know, maybe it's a pricing thing. Do Americans get cheap weed or something?

  • The article sorta ignores the fact that weed is NOT tobacco, and isn't consumed in the same fashion; nobody needs to smoke an entire joint anymore, when potency is such that a hit or two will more than do. I expect that when joints are sold, they'll be sold more like cigars or wine; individually. If you're smoking socially, it makes more sense to have tasting parties where people can try different varietals. People who toke for medical reasons will probably prefer edibles and vaping to spliffs and blunts.

  • Jamal Jenkins

    3 grams? You must be smoking the worst bud on earth. Here in California a hit or two will do.

  • Rhonda Kowalczyk Majewski

    NO mixing tabacco with cannabis, I tried it once and got sicker than hell.

  • Anthony Shevlin

    And I can tell you why.

    In Denmark we smoke both hash and cannabis, and most people mix with tobacco. We roast our cigarettes to avoid getting a nicotine poisoning, which you can get from mixing THC and Nicotine. I hope that helped. TOKE!

  • Hans Duex

    maybe cannabis will head the same way as clothes or alcohol and most other kinds of products - different brands at different price ranges

  • Hans Duex

    also in amsterdam, you can smoke 100% cannabis joints indoors, but no tobacco indoors

  • Sal Volatile

    How much will a pack cost me? ZERO. I will absolutely, positively NOT buy a pack of joints from big tobacco or any corporation, period. Never ever ever.