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Legal Weed Prices are Dropping, But California’s Recreational Sales Start Could Cause a Spike

New cultivation and production regulations paired with otherworldly demand could make Golden State bud temporarily cost more than competition in nearby states.

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California’s move from medical marijuana’s unregulated wild, wild west to recreational cannabis powerhouse has been the industry’s most anticipated event since Colorado’s adult market came on line almost four years ago. With what is widely acknowledged as the world’s best weed and millions of users and tourists already flocking to the West Coast, California’s local industry is expected to bring in billions of dollars in only a few short years. But with the entire state trying to adapt at once, some experts are expecting Golden State green to cost a pretty penny.

In states like Colorado and Washington, steadily dropping production costs and an influx of venture capital caused by legalization has lead the price of cannabis to fall, a luxury California stoners might not have for some time after retail sales start.

"The first quarter of next year, prices will probably go up," Jonathan Rubin, CEO of New Leaf Data Services LLC, a company that tracks wholesale cannabis prices in states where weed is legal, told the L.A. Weekly. "What I think you'll see is that the traditional winter price increase will be much bigger than it was this year. Because there's going to be compliance costs and testing. I can almost guarantee bottlenecks in testing and permits."

Only a fraction of the state’s growers have indicated a desire or ability to conform with California’s impending regulations, and with demand expected to be off the charts starting in January, it may take some time before enough sanctioned suppliers come online to satiate left coast stoners.

Even if it takes some time though, industry insiders expect California cannabis prices to drop eventually, even soon if the big businesses jumping on the state’s green rush can get their product to market by the second half of 2018.

"There will be big commercial flower growers starting to grow cannabis," Rubin said. "There will be a lot of new entrants with commercial farming backgrounds and best practices methods. That's all going to drive prices down."

In the meantime, Rubin and other insiders expect the weed from this year’s final fall harvest season to be sold at rock bottom prices, with cultivators trying to sell out fast enough to amass the heaps of capital necessary to comply with 2018’s recreational rules. The wholesale price of California’s outdoor MMJ has already fallen from $1,542 per pound in the first six months of last year to $1,133 in 2017.

The price drop represents the last gasp of California’s ground-breaking medical marijuana industry before recreational regulations give the entire market a face lift - including some, albeit temporary, legal weed price hikes.

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