The Declining Price of Marijuana
As of March 2016, dispensaries in Washington State were selling a gram of weed for $9.32, according to a Washington Post report citing the state’s Liquor and Cannabis board, while the wholesale price per gram was just $2.99.
Compare those prices to September 2014, when marijuana was costing consumers around $25 per gram. Just one year later, it had dropped more than 50 percent to $11 per gram.
Even though prices went up when pot was legalized, there is obviously a rise linked to the increased demand and limited source, said Steve Davenport of the Pardee RAND Graduate Institution Davenport, helps aggregate data from Washington’s cannabis plank.
Since that time, prices have been decreasing at a monthly rate of 2, Davenport told the Washington Post, plus they may potentially shrink twenty five percent every year.
“It’s only a plant,” Professor Jonathan Caulkins of Carnegie Mellon University told the Post.
Caulkins said weed could become so inexpensive that eventually some will be given away free of charge.
“There will always be the marijuana equivalent of organically grown specialty crops sold at premium prices to yuppies,” Caulkins said. “But at the same time, no-frills generic forms could become cheap enough to give away… the way bars give patrons beer nuts and hotels leave chocolates on your pillow.”
These bargain prices are not unique to Washington State. We have also seen prices plunge in Colorado.
Fortune Magazine reported last summer that an eighth of an ounce cost between $30 and $45-notably less than the $50 to $70 it was going for the year before.
As marijuana prices trend downward, there are pros for the buyers you, and negatives for sellers like The Green Solution. Lower prices are not great news for the state either because pot is taxed by sale; falling prices mean less money for the government.
On the reverse side of that, reasonably priced pot could encourage people to obtain legal sources, undercutting the black market, which ultimately means less dependence upon law enforcement.
But, despite having pot prices falling, new businesses continue steadily to appear, Denver-based KUOW radio reported.
“Standard theories of economics would only suggest entry into an industry when people see that it’s profitable,” said Tracey Seslen, a lecturer at the University of Washington.
As legalization becomes increasingly more widespread around the united states, the upsurge in marijuana cultivation and drop in prices will produce benefits and drawbacks.
If the pros outweigh the cons is something the industry must observe as time passes and modify to accordingly.
Could this lead to more businesses that are marijuana friendly while at the same time decrease crime? Only time will tell.