Losing 33 Pounds Of Marijuana: The Cost Of Doing Business

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Different strains of medical marijuana at Coffeeshop Blue Sky in Oakland, California. Justin Sullivan/Getty Images hide caption

itoggle caption Justin Sullivan/Getty Images

Fed Ex recently left a 33-pound box of marijuana on a doorstep in Washington, D.C. It was the wrong doorstep. So the couple that lives there — a former Air Force intelligence officer, and a former prosecutor in the U.S. Attorney's office — called the cops. Here's the story from the Washington Post.

David Kestenbaum, Planet Money's chief drugs correspondent, brought the article to my attention because of its lucid explanation of why losing a big box of marijuana (which apparently happens all the time) is just part of the cost of doing business:

When undercover officers make wholesale buys, usually they pay about $1,000 a pound for medium-grade marijuana. So the 33 pounds that Anderson and Sloan received probably cost the local importer about $33,000. As a rule of thumb, a pound can be stretched into 360 $10 bags, meaning the shipment's retail value was nearly $120,000.

That's a profit of $87,000 or so. Multiply that by, say, five shipments, and the overall profit is north of $400,000. If you lose one of the five packages, so what? You're still roughly $300,000 in the black.

For more on the economics of illicit drugs, check out the podcast where Kestenbaum interviewed a Harvard economist about the economic implications of medical marijuana laws, and read this blog post on what drives the price of the drug.

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