Marijuana prices show signs of leveling out
Supply is starting to catch up with demand
ARE POT PRICES in Massachusetts finally dropping?
Since Massachusetts allowed the first legal marijuana sales in November 2018, prices for legal cannabis have remained high. High prices are one factor cannabis consumers have cited in explaining why they continued to buy illegally, from friends or dealers.
But data from the state Cannabis Control Commission suggest that as the industry matures, prices are going down. A chart on the CCC’s public data website shows that when the legal industry first launched in 2018, the monthly average cost for an ounce of adult-use cannabis was around $390 — a figure that topped $400 in early 2019. But since then, the price of legal cannabis has been steadily declining. It had gotten down to $370 or $380 an ounce pre-pandemic. Since 2020, prices have continued to drop, hitting a monthly average price of $362 an ounce in September 2021.
Kamani Jefferson, an adviser and board member of the Massachusetts Recreational Consumer Council, said it is not surprising that prices are leveling out as the market matures. “There are more dispensaries and more growers, so the supply starts to get to the level of demand,” Jefferson said.
That said, Massachusetts continues to have higher prices than other states, particularly western states like Colorado, California, Oregon, or Nevada.
Borghesani said part of the reason is Massachusetts remains a relatively young market, and it is surrounded by states that don’t yet allow legal sales. As other nearby states – like Vermont, Maine, and New York – start allowing legal shops, the price is likely to drop further, since some of the demand today comes from out-of-state consumers buying marijuana in Massachusetts. (Legally, a consumer is not allowed to transport marijuana across state lines.)Jefferson said the licensing structure in Massachusetts has also driven prices up, since various compliance and security requirements make it expensive to get a license. (MassLive previously reported on the phenomenon of Massachusetts medical marijuana patients driving to Maine to buy significantly cheaper marijuana, since Maine has far looser regulations governing the growing and sale of medical marijuana.) The CCC has also taken a long time to approve enough licenses to get the industry fully up and running, and some communities have been hesitant to approve host community agreements, which led to limited supply in many areas of the state.
Jefferson said now that there is more competition, that is likely to also drive prices down, since a consumer can compare prices at nearby dispensaries and pick the cheapest one.