(Rebecca O'Neil, Sierra Sun)

PLACERVILLE, Calif. — If the cannabis market — legal and illicit — was looking risky before, the industry’s countenance is now straight hostile.

“We’re seeing a lot of flower selling plus or minus $300 a pound — that means it could be as low as $200 or as high as $400,” said Basil McMahon of Elevation Distro. “It’s hard to make a living to sell flower at that price.”

The oversaturated market eliminates any sort of financial incentive one might have had to go legal, according to licensed cultivator Brad Peceimer, who noted that the state’s cultivation tax alone requires the grower pay $161 per pound of the product.

That is “separate and in addition to the effective 27% excise tax” assessed at retail, McMahon said.

Daniel Batchelor, owner of both the dispensary and the distro, said that each tested batch — separated by strain — is subject to a $500 Certificate of Analysis charge.

Peceimer said many growers will take a loss in the current market’s conditions given the government’s sizeable and guaranteed cut of the product before cannabis seeds, or clones, can ever take root.

“That’s before you pay for the water in the ground, the fertilizer or soil amendments, the labor,” Peceimer said, adding that there’s little relief for small time farmers looking to scale up. “There is no return. If you were growing barley and it cost you $1 a pound to grow but it sells for 50 cents, growing more doesn’t make you twice as rich, it makes you twice as poor.”

Peceimer said he has heard of pounds selling for as low as $150 on the black market. Even tax free, Peceimer said the profit margin is hardly worth pursuit. […]