Reading between the lines of Lambeth drug price data

Supply and demand models implicitly suggest that effective law enforcement interventions against drug shipments create shortages which in turn lead to higher prices. While it is widely accepted that the consumption of chronic users is inelastic, it is hoped that shortage-induced price hikes will deter experimenters and dissuade recreational users. Data gathered by the Independent Drug Monitoring Unit over the 2000-2002 period, suggests however, that this hardly applies to the cannabis market. While the research records considerable fluctuations for wholesale prices, retail prices have kept steady.

The research looked into prices for the following units: 1/8^th ounce, and 9 ounces; we work on the assumption that the first two unit costs are retail prices, and that 9 ounce deals are the entry unit for petty dealers.

It was found that the average wholesale prices for cannabis resin (9 ounces) fell from £ 446 in 2000 to £ 299, a drop of £ 147  (33%), while retail prices for the lowest unit in trade showed a negligible increase over the period. The benefit of falling purchase prices was kept by the dealers and not passed on to customers. The converse is the case in the case of skunk sales, where whole sale prices rose from £ 740 per 9oz in 2000 to £ 883 in 2002, increase of £ 143 (19%). End users, however, were charged slightly less, as the price for 1/8^th ounce dropped from £ 21 to £ 20.70 (2 %).

Prices also remained steady at the higher denomination of 1 ounce. It seems that by and large, retail dealers were absorbing losses and pocketing windfalls from wholesale fluctuations to stabilise the market.

One of the emerging themes in the Ænormalisationà of drug use (Parker and Measham) has been the quest for Æhassle freeà transactions, free from fear of being victmised, exploited or arrested. Lambeth, partly with its reputation and entertainment venues attracts large numbers of outsiders looking for drugs. The vibrant drug street market caters for some of this demand, but more significant in terms of volume are probably the large numbers of social supply dealers not readily listed in the existing typologies.

Working from their own premises, these new social supply dealers, will service an irregular client base running into hundreds. They recruit their purchasers though introduction and never advertise their services or push their wares aggressively. Often a range of products is on offer in addition to cannabis, particularly MDMA, amphetamine and cocaine. Working in a densely populated area, many work in casual partnerships, referring customers to each other, and bulk buying from their suppliers. Interestingly, crack cocaine and heroin are shunned, and customers discouraged from inquiring.

The only criminal involvement of these social supply dealers is the drugs trade with no cross over with, say dealing in stolen goods, social security fraud, or credit card fraud. Entrepreneurial activity outside the drug trade is strictly licit, and usually in the music/entertainment field. Most are employed, many with attractive career prospects. Drug dealing provides a lucrative sideline, and a lifestyle choice.

The burgeoning demand for stable drug trading emporia and places for consumption has also produced a diluted down version of the Dutch coffeeshop. A retail outlet with a legitimate front, and a drug selling back window where herbal cannabis is sold in money units, not weights-bags for £10, £20 or £50. At a nearby caf¸ smoking is tolerated. Customers from all over London frequent both establishment, with orderly queues of formally dressed office workers forming in the early evening.

On the basis of these preliminary results we therefore suggest that a separation of the drug markets is in process. The distribution of the most popular and least stigmatised substances is being effectively detached from the criminal scene. The implications of this trend are profound, with on the one hand, ever wider access to these Æsocially acceptedà drugs, while on the other creating barriers against those that arenÃt. A different question arises over how the law should handle the social supply dealers.

It seems paradoxical to arrest and convict such people, thereby extinguishing their licit career possibilities and effectively forcing them to fully engage with crime.

The ongoing process of separation and self regulation in the drug markets provide a promising beginning for the effective regulation of the drug markets. It would be encouraging if the Lambeth experiment could be followed up by more constructive government engagement with the drugs supply.