Oversupply and stiff competition have pushed Massachusetts' legal weed prices to a record low.
This January, the average retail price for a gram of legal Massachusetts bud dropped to $7.12 a gram, according to data from the state Cannabis Control Commission. That's less than half of the record high of $14.68/gram, which was reported back in January 2020. The state's average monthly prices initially dipped below $14/gram for the first time in June of 2021, and have been declining steadily almost every single month since.
The plunging prices aren't due to a lack of interest in weed, either. Massachusetts residents have copped well over $4.17 billion worth of legal cannabis since sales began in 2018, and nearly $200 million in the first 6 weeks of 2023. But the state's legal cultivators are now producing way more weed than local stoners can burn, an issue that has cropped up in almost all other adult-use states. This excess stock of bud has started pushing wholesale prices into a steady decline as well.
In order to maintain the same profit margins they were seeing two years ago, cultivators and retailers alike must now sell twice as much weed as they did back then. The demand for legal weed certainly hasn’t doubled, though, and federal law prevents state-legal weed companies from legally selling their bud to stores in another state. Some industry insiders are now calling for state regulators to step in and start consolidating legal operators.
"The profits are not there," Blandine Jean-Paul, vice president of marketing at multistate cannabis operator Ethos, said to NBC10 Boston. "Becoming cash positive is a huge hurdle in the cannabis industry... I'm not advocating for businesses to lose their licenses, but I do think that there's some thinning out that needs to happen in the industry overall. States like Massachusetts, I think, are probably a prime case for that."
The Bay State is also starting to lose out on steady out-of-state sales. Massachusetts used to be the only place on the East Coast where adults were legally allowed to buy weed, and many residents from neighboring states were happy to cross the border for some top-shelf legal grass. But today, every single one of the state's neighbors, with the exception of New Hampshire, has launched its own adult-use retail market, and out-of-state sales are now shrinking.
Industry stakeholders are predicting that 2023 will be a particularly bleak year for Massachusetts' legal weed industry. “It is no secret that it is very crowded at this point,” said Matthew Yee, COO of Enlite Cannabis Dispensary in Northampton, to MLive. “The whole green rush is over at this point. Everybody knows it.”
Nearly every other mature US cannabis market has seen its revenue contract over the past couple years. In Oregon, years of chronic oversupply issues have driven the average retail price for legal bud down to $4 a gram. These plunging prices are making it difficult for dispensaries to pay cultivators back for the weed that they are selling, which is in turn making it hard for legal growers to stay in business.
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