Buying cannabis at your local dispensary may be easier than ever on your wallet.
Legal cannabis prices have been on the decline for several years and could continue to drop in 2018, according to a new report.
Cannabis Benchmarks has found that the wholesale price of cannabis has been declining since 2015 when the firm first started to analyze market trends for the industry. In 2015 the average price per pound of cannabis was just over $2100. That number dropped to $1789 in 2016. In 2017 the drop continued with the average price per pound of cannabis equaling $1562. Wholesales prices may not have bottomed out but could do so soon.
“It’s anyone’s guess exactly where that is, considering the different market structures in the various states,” said report author Adam Koh “But I think we’re getting close (to the bottom).”
Declines have been seen across the United States but have been less pronounced in the more established recreational markets such as Colorado and Washington.
“While prices declined in (Colorado and Washington), they did so fairly gradually,” Koh said. “The landscape in those two markets is pretty settled on the whole, so you didn’t see a lot of abrupt regulatory changes like you’ve had in the past — no big overhaul of rules like what took place in the first couple of years of those markets. So businesses were just able to go about their day-to-day operations with less turbulence.”
Washington D.C. has been slow to embrace legalized cannabis and U.S. Attorney General Jeff Sessions rescinded the Cole Memo in January, a key protector for state businesses and patients from federal prosecution. Even with that action, Koh is not forecasting any major shakeups in the industry.
“Until there is some sort of concrete (federal) enforcement, all the huffing and puffing really doesn’t affect the market dynamics on the ground,” he said. “Businesses… can’t worry about it until something happens. They’ve been living in this gray area for some years and so they’re just going to continue doing what they’re doing.”
There are several markets coming online that could impact the average wholesale price of cannabis when the 2018 numbers are calculated next year. Recreational cannabis sales started on January 1st in California and will pick up as the year goes on and more shops are licensed by the state. Massachusetts is also expected to start recreational sales this summer.
