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The Price of Marijuana Is Steadily Dropping in Canna-Legal States

Despite high state taxes, legalization is making cannabis more affordable to consumers.

by Chris Moore

A recent analysis of retail cannabis prices in Washington state has found that the price of marijuana has dropped consistently since cannabis was legalized. Retail prices in Washington have fallen every single quarter since legal sales began in July 2014, according to Steven Davenport of the Pardee Rand Graduate School. When Washington's retail cannabis stores opened, marijuana was being sold for between $20 and $25 a gram. By this July, the price fell to $7.38 per gram including tax, a 67% decrease in just three years.

Davenport said that he expects the price to continue to decline, as canna-businesses discover new ways to lower prices to undercut their competitors. “Some consumers will prefer higher priced brands, but there will always be a market for the brand that can produce adequate quality cannabis at the cheapest cost,” Davenport said. 

Jonathan Caulkins, a professor at Carnegie Mellon University, said that “there will always be the marijuana equivalent of organically grown specialty crops sold at premium prices to yuppies, 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.”

Even though legal cannabis producers must pay state licensing fees and taxes and cover the cost of safety testing, growing cannabis illegally is even more expensive. Growers in states where marijuana is prohibited must operate in secret and pay higher wages to employees to make up for the risk of arrest. These factors can help legal cannabis growers undercut black market weed prices, which can in turn make illegal cannabis grows even less profitable.


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Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.



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