During the initial period right after legalization, residents of Colorado and Washington came to an unfortunate realization – legal marijuana was expensive. An eighth that would have cost you $50 from your illegal dealer would end up costing you upwards of $70-80 in a retail dispensary during that first year or so. Sadly, this drove many residents to continue to buy marijuana illegally, where it was all around more affordable – the main revenue of those cannabis shops came from out of state residents looking for the “legal weed experience”, as it were.
As time has gone on, that price has significantly dropped – bringing in more local customers and effectively reducing the amount of work for law enforcement as it becomes less profitable to sell cannabis illegally in these states. In Colorado, the price of a gram has dropped from almost $9 a gram (before taxes) in 2014 to the average of almost $7 per gram, effectively dropping the price of an eight to around $40 in most retail dispensaries.
In Washington, the initial price of a gram was about $20 – peaking at $25 shortly after that. This year, that price has dropped to around $10 per gram – half of what it cost just two years ago. There are multiple factors that have led to these price drops, the main one being competition. In Washington, there was a shortage at first as they didn’t have nearly enough dispensaries open and this drove prices up – as new businesses opened up, the prices have steadily declined.
These price drops are definitely what started to drive more local cannabis users into dispensaries and away from their previous dealer – after all, you go where the best prices are, right? According to a report by Steve Davenport of the Pardee RAND Graduate School and Jonathan Caulkins, a professor at Carnegie Mellon University, the price of cannabis in Washington has been steadily declining at about 2% a month since that peak price – and it should only continue to drop as demand increases.
“It’s just a plant,” Jonathan Caulkins, a professor at Carnegie Mellon University who also conducted the research, told the Post. So, once it’s widely available, there’s no reason it should cost more than any other produce. “There will always be the marijuana equivalent of organically grown specialty crops sold at premium prices to yuppies,” he said, “but at the same time, no-frills generic forms could become cheap enough to give away as a loss leader — the way bars give patrons beer nuts and hotels leave chocolates on your pillow.”
Only time will tell if the same trend ends up being seen in Alaska and Oregon after implementing legalization – but if these results are anything to go off of, marijuana may start off on the expensive end, but prices will quickly drop to something much more reasonable for the everyday consumer.