Experts Predict Cannabis Prices will Continue to Drop

U.S. cannabis prices are in decline in nearly every market—what a great time to be alive. The average retail price in states that have legalized recreational or medical cannabis has dropped from around $15 per gram to around $10 per gram, according to a new report from the Wall Street Journal.

Consumer savings begin with wholesale pricing. From wholesale cannabis’ peak value in September 2015 of about $2,133 per pound, average wholesale prices across the country dropped to $1,626 per pound for the week ending September 1, 2017, according to New Leaf Data’s Cannabis Benchmarks. And prices are projected to continue falling.

Jeremy Moberg, an environmentally conscious cultivator in Washington, believes cultivators have to make themselves stand out in order to survive the competition. One of the ways of doing that is convincing the consumer that the product is better than the commercial cannabis being churned out by larger cannabis producers. “The socially conscious, premium customer is going to want us because we’re sustainable,” Moberg told the Wall Street Journal. “It only takes me 30 seconds to convert somebody wearing Patagonia and driving a Prius that they should never smoke indoor weed again.”

According to Steven Davenport of Pardee Rand Graduate School, cannabis prices in Washington have fallen at a steady rate since recreational sales began in the state in July 2014. Washington’s current retail price is $7.38 per gram including tax and is projected to continue falling. The drop in value represents a 67 percent decrease over a three-year period since legalization began.

It normally takes decades of slow decline for illegal drug prices to drop, but legalization is causing cannabis prices to drop much more quickly. The drop in price is great for cannabis consumers, but not so great for retailers. The increasing demands of competition are forcing retailers to come up with more inventive ways to stay afloat while competing with cheaper prices.