http://www.npr.org/templates/story/story.php?storyId=126806429excerpt
For decades, illegal marijuana cultivation has been an economic lifeblood for three counties in northern California known as the Emerald Triangle.
The war on drugs and frequent raids by federal drug agents have helped support the local economy — keeping prices for street sales of pot high and keeping profits rich.
But high times are changing. Legal pot, under the guise of the California's medical marijuana laws, has spurred a rush of new competition. As a result, the wholesale price of pot grown in these areas is plunging.
Demand Not Meeting Supply
In 1983, the Reagan administration launched a massive air and ground campaign to eradicate pot and lock up growers in northern California. Charley Custer, a writer and community activist, had just arrived to Humboldt County from Chicago. With the Reagan crackdown, Custer recalls, wholesale prices shot up — to as high as $5,000 a pound. That sudden and ironic windfall for those growers willing to risk prison time transformed the community.
"A lot of people were living on welfare and peanut butter and banana sandwiches for a long time before pot made it possible to be part of the middle class," Custer says.
Nearly 30 years later, Custer says that boom may be over.
"Outdoor growers are having a hard time unloading their fall harvest," Custer says. "And this is six months later and when some people do move it, they don't get nearly the price they were hoping for."
That goes for both legal growers who cultivate limited quantities of pot under the medical marijuana laws and illegal operators who often grow larger amounts.
Prices are now much less than $2,000 a pound, according to interviews with more than a dozen growers and dealers. Mendocino County Sheriff Tom Allman says some growers can't get rid of their processed pot at any price.
"We arrested a man who had … 800 pounds of processed," Allman says. "Eight hundred pounds of processed. And we asked him: 'What are you going to do with 800 pounds of processed?' And he said, 'I don't know.'"
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