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Estimated Economic Effects of UK Cultivation

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The Office of National Statistics (ONS) derived four estimates, for discussion only, of the value of total UK homegrown production in 1996, from NCIS estimates and official statistics. 115,647 cannabis plants were seized by police in 1996 (and 472 by Customs). Assuming that each plant produced 100g, a production cost of 170/kg, and a street price of 3,460/kg, this would have had a street value of 38,047,864. The value of what was not seized could thus be estimated, by assuming that police seize between 0.5% - 2% of the total produced, and that all plants are intended for sale.

 

Table 11

ONS Implied values of all UK Home Grown sold by assumed police seizure rate

Police Seizure rate

Quantity grown (kg)

Costs (m)

Street Value (m)

0.5%

2,301,000

390

7,960

1%

1,145,000

190

3,690

1.5%

759,000

130

2,630

2%

567,000

100

1,960

 

As most of any drugs" "street value" is due to distribution margins, the ONS suggest, "own use" production may be of relatively low economic value compared to production for sale. They have assumed it to be negligible.

"Own use" growing represents consumers" money being kept out of the criminal economy, which otherwise would perhaps have been spent on imported cannabis. For the legitimate UK economy, it can be seen as a net gain.

Our data suggests that the majority of UK grown cannabis is for "own use" and a proportion of the rest is given away. Our street price estimate is lower, partly because of the many 0 prices quoted. We consider it an optimistic assumption that as much as 15g of cannabis reaches the marketplace per plant grown.

The NCIS estimated cost of production (170/Kg) is plausible. An indoor lighting system and "skunk" type hybrid seeds or cuttings, for the best quality, could cost 100 to 350 to produce a kilo, however, perhaps only 200g would be marketable. Entirely natural growing might cost nothing, but very little sellable product would result.

Following the same assumptions about police seizure rates, and accepting that the cost of production was 5% of street price, we can produce alternative illustrative estimates of the total market values of home grown. These are around one tenth of those suggested by the ONS.

Table 12

IDMU Implied values of all UK Home Grown sold by assumed police seizure rate

Police Seizure rate

Quantity grown (kg)

Costs (m)

Street Value (m)

0.5%

345,150

38.7

773.1

1%

171,750

19.2

384.7

1.5%

113,850

12.7

255.0

2%

85,050

9.5

190.5

 

*Mean Homegrown 1/8th price = 2.24/g

Changes Since 1994

The 63% of respondents who had ever grown cannabis was an increase of 3% since our 1994 survey. The mean number of plants grown was 23.9, an increase of just under 5 plants. 43% of growers had used "pedigree" seeds and 20% had taken cuttings to produce at least part of their crop, which would usually be done to ensure female plants and/or "skunk" or similar hybrids. These were all increases from 1994. The use of seeds from imported bush has gone down. However, 70.5% had used only natural lighting, and 54% grew only indoors, which would not usually produce commercial quantity or quality. Use of high intensity lighting, hydroponics and pedigree seeds had increased by 5%, 2% and 8% respectively. Commercial growers would be more likely to have larger crops, avoid mixing seed types, and use greenhouses or multiple growlights.

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