As marijuana continues to be legalized across the country, the effects of prohibition are starting to come to an end. One of the major effects of selling an illegal substance, is that it makes the price of the product much higher. There is more risk and added expense in cultivating the illegal substance and therefore, consumers pay a higher price. Since the advent of the legal recreational industry in the U.S., the price of cannabis has begun to drop. In fact, marijuana sale prices have gone down every quarter without fail since July 2014, which was when the first legal marijuana went on sale.
Why Prices Will Probably Continue to Drop
According to The Washington Post, Steven Davenport of the Pardee Rand Graduate School, who conducted an analysis of marijuana prices in Washington state since its legalization in July 2014, explained, “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.” He believes that marijuana businesses see this as a successful business model and, for this reason, the prices are expected to drop further.
A Snapshot of Legalization in the U.S.
8 states have now legalized marijuana for personal use by adults over the age of 21. Washington, Oregon, Colorado and Alaska were the first states to legalize the plant. Last November, they were joined by California, Nevada, Maine and Massachusetts. This represents 20 percent of the country and, as more states have been working on legalization bills, we will no doubt see more states pass the law over the next few years. Washington D.C. has also legalized recreational marijuana, although the district has not yet set up the infrastructure for its sale as yet.
Higher Quality Organic Marijuana
Prices have fallen 67 percent in the state of Washington since its legalization and this kind of drop in price is reflected all throughout the country where the plant can be bought legally. It is expected to continue to dip and now the only promise that cultivators and sellers have for making a higher profit are from high quality, specialty organic grows. Those able to create boutique, high quality marijuana will find that they can sell their cannabis for a higher price. In general though, prices are dipping and there doesn’t seem to be a way around this. Adjusting and advancing seems like the best way to move forward.
Cannabis, while being made legal in 20 percent of the country, is still illegal on a federal level. It is still considered a Schedule I drug, the highest risk category, alongside heroin and LSD. The current Attorney General Jeff Sessions is a very vocal, long time prohibitionist who has made it clear that if he had his way, he would crack down on both recreational and medical marijuana. Despite this, several bills are currently being reviewed that involve changing this classification. If this occurs, marijuana may become legalized sooner than imagined and the prices may continue to fluctuate until then. It is such a new industry, that some fluctuation is to be expected. At any rate, it appears that the decline of the black market will come hand-in-hand with lower prices.