As more states in American legalize marijuana — either for medicinal or recreational use — the weed market is rapidly shifting.
As of now, medical marijuana is legal in 23 states and recreational pot is legal in Colorado, Washington, Oregon, Alaska and the District of Columbia.
According to the Washington Post, marijuana legalization has a nearly immediate impact on the price of pot being sold.
For example, in Washington state, where recreational marijuana was legalized in 2012, Steve Davenport of the Pardee RAND Graduate School told the Post that marijuana prices ballooned for a couple of months — mostly as a result of supply issues — before beginning a downward tumble in both the retail and wholesale markets.
Davenport said that prices “are now steadily falling at about 2 percent per month. If that trend holds, prices may fall 25 percent each year going forward.”
According to CheatSheet, legal marijuana (in flower or bud form) averages $10 per gram. Of course, that price varies considerably depending on the strain and its quality — and there are dozens and dozens of strains. (Let’s not even get into the growing array of “edibles” coming on the market.)
According to CheatSheet, these are three of the most important factors affecting prices of legal pot:
- Location: Not surprisingly, location is key when determining price. If you find a shop that is inundated with pot, there’s a good chance they’ll sell it to you on the cheap side because they have such a large supply. Of course, if you visit a tiny store in an expensive part of downtown Seattle, San Francisco or Portland, you’ll likely end up paying more for the same weed. There are also widely varying costs between medical dispensaries – which are often shielded from most taxation – and recreational dispensaries, where taxation can be high.
- Taxes: Each state that offers some sort of legal marijuana has different tax levels, Cheat Sheet explains. For example, Washington state charges a 37 percent sales tax on marijuana. In Colorado, the tax rate is closer to 12.9 percent.
- Quality: This is perhaps the most significant factor when determining the price of pot. “There are various strains and grades of marijuana, and the better they are — which may mean containing more THC, CBD, or simply having fantastic aesthetics or smells — the more you’ll pay,” explains CheatSheet. “Top-grade stuff can go for a lot of money, so if you start getting snobby about your cannabis, you’ll end up paying for it.” On the other hand, if you’re not too picky about your pot, you can probably score low-grade marijuana on the cheap side (maybe even as low as $5 per gram).
This is just the beginning of legalized marijuana in the United States. It’s a growing market that will no doubt continue to shift and change.
“It’s just a plant,” Jonathan Caulkins, a professor at Carnegie Mellon University, told the Post. “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.”
Do you live in a state with legalized marijuana? Share your comments below or on our Facebook page.
How to find cheaper car insurance in minutes
Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.