The promise of legalizing recreational marijuana in states like California, Colorado and Oklahoma was, in the eyes of stoners and newbies alike, the debut of a new era in which high-grade bud is convenient and affordable to cop.
But in the years that have followed the passage of new laws to expand the pot market, pot smokers have noticed that while convenience and access may be improved, prices are not — indeed, by many measures, good weed is as expensive as it ever was.
Per multiple reports from industry insiders, pot experts and legal observers, the stress of supply-and-demand imbalances, plus the burden of significant taxation by the city and state, is keeping the price of marijuana high. There’s no doubt that present-day pot is stronger and more refined than anything the U.S. market has seen in the past, or that there are more consumer brands and products than ever before. Yet the puzzle of lowering costs for both consumers and independent operators remains uncracked, leaving many users — including medical patients — struggling to afford their high.
The price of marijuana depends on which city you’re shopping in and what product (flower, vaporizer cartridges, edibles, etc.) you’re seeking, but for a general framework, we can look at California, which is the biggest legal pot market in the world.
According to industry trackers, wholesale pot in California comes in a variety of price points, ranging from $500 to more than $3,000 per pound for especially rare crops. If we consider an average price of $1,200 per pound for high-quality, outdoor-grown cannabis, it breaks down to $75 an ounce wholesale. After the weed trades hands and is portioned, packaged and branded for resale, that same ounce is sold for about $250 to the consumer. That price dips toward $200 in states like Oregon and Colorado, but also balloons beyond $300 in states like New York and Vermont.
The strange thing is, those average prices for the consumer haven’t changed much, even when there’s a glut of wholesale pot available for low prices. One ongoing case study comes from California’s famed “Emerald Triangle,” once the foundation of the California pot economy, where small outdoor farms are being crushed in a price slump attributed to a huge influx of high-quality indoor and “light-deprivation” greenhouse crops after several years of lean harvests.
In theory, this should mean a boon for consumers, especially anyone looking for good quality pot that doesn’t have the insane THC levels of the most “prestigious” indoor-grown buds. But consumer prices haven’t been touched at all — instead, it’s just independent growers who have been left with literal tons of marijuana they can’t sell.
The dilemma is an example of how a convoluted market full of regulatory fees and rules on retail is diminishing the potential of the pot industry to reach more people who want it. In California, restrictions on where dispensaries can open mean there’s a massive imbalance in the number of farms versus storefronts, leading to problems like the 2021 supply glut. For prospective retailers, the high taxes, limited number of licenses and pricey fees means that starting a dispensary operation is risky despite a legal framework. It’s a similar tale in Oregon, where illegal farms keep blooming thanks to demand for cheaper black-market weed and interstate smuggling.
What this means is that bigger brands and corporate operations backed by investor funding are better suited to ride out the waves in the market and wait for future changes, some experts say. In California, the rise of extremely large pot farms is cause for concern for independent growers that may find themselves bullied by bigger fish. “[They’re] continuing to bring hundreds of acres of new production online despite the fact that there’s no market for new large-scale production,” Humboldt County Growers Alliance Executive Director Natalynne DeLapp told SiliconValley.com.
Could allowing for the opening of more dispensaries help?
Potentially, and cities like San Francisco are launching efforts to lower the cost of business for pot shops, which could help prices for consumers. Another big help would be for the federal government to allow banks to work with marijuana operations in legal states; finding workarounds for financing and payment processing is extremely costly.
Ultimately, the “light at the end of the tunnel,” as DeLapp puts it, may be federal legalization — a sweeping move that would allow for the sale of pot across state lines and balance the supply and demand issues plaguing various pot markets across America. Even that move, however, would come with its share of issues; some suggest additional federal taxation and regulatory fees would drive up prices in a place like California.
But perhaps that step is still a better one than the reality we have now, in which a legal market keeps prices as high as ever, while the black market thrives underneath the surface, offering better deals and less oversight for growers, sellers and buyers alike. There may be record demand for legal pot, but humans have a habit of seeking the easiest path to the best deals.