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Study Finds Colorado Weed Prices Dropping Fast

Gracie Malley/Cannabis Now

Economics

Study Finds Colorado Weed Prices Dropping Fast

Since Colorado legalized recreational sales of marijuana in 2014, the industry has been booming, with the state reaping $60 million in tax revenues last year from marijuana sales alone. However, as the market continues to be flooded with more users, more dispensaries and more growing facilities, the price of marijuana in Colorado has been rapidly falling, according to a study released today from a global brokerage company in New York.

Over the past year, the cost of an ounce of recreational marijuana has decreased by an average of about $100, the study from Convergex found, decreasing from about $300 or $400 last June about $250 to $300 now. Similarly, an eighth of an ounce sold for about $50 to $70 last June, compared to $30 to $45 now, according to the study.

“More competition and expansion of grow facilities contributed to this price decline,” wrote Nicholas Colas in the summary for the report, “but it is also a natural result for any maturing industry as dispensaries try to find the market’s equilibrium price.”

Part of the price drop can be contributed to the increase in vertical integration strategies for dispensaries, the study noted. Colas wrote that Convergex’s contacts in the Colorado’s dispensary industry had been buying additional warehouses and expanding grow facilities to cut down on middle-men costs passed on to the consumer.

The shifts in the cannabis market “shouldn’t be too much of a surprise,” Colas said. For example, the fact that the study found that the market’s more saturated areas, such as Denver, tend to have cheaper prices keeps with the time-tested model of supply and demand pricing.

The study also found that recreational cannabis sales grew 98 percent over the last year in Colorado, based on reports from the Colorado Department of Revenue that stated a 98 percent increase in sales tax revenue. Convergex also projected a 50 percent increase in revenues for this year up to $480 million for recreational marijuana sales.

Prices will drop even further for a one-day tax holiday on Sept. 16 in Colorado when a Governor John Hickenlooper will repeal the sales tax on marijuana based on a glitch in their state’s constitution. Then, in 2017, the sales tax will be permanently dropped from 10 percent to 8 percent on marijuana sales in an effort to put pressure on the black market.

“We still have a black market, and we want to moderate our taxes to make sure that the risk of someone selling illegally… We want to eliminate that,” Hickenlooper said in the Denver Post. “And one way is to make sure there is not as large a price differential.”

How much do you pay for cannabis? Let us know in the comments below.

12 Comments

12 Comments

  1. celeste

    June 24, 2015 at 10:25 am

    10 a gram. So a eigth would be 35, a half 140, and a ounce is 280. Thats average black market prices.

  2. Shade

    June 23, 2015 at 9:51 pm

    I pay $90 an eighth for kush(medical grade) and
    $40 for a half reggie(low quality)…..

  3. juice

    June 23, 2015 at 4:51 pm

    Too much in Florida and quality sucks been smoking Mexican for 90 a half

  4. MJ

    June 23, 2015 at 11:10 am

    I pay $100 regularly for an ounce just after he harvests I usually pay $80 for pretty high quality

  5. A

    June 23, 2015 at 8:53 am

    I’d imagine prices would continue to drop until the price is in line with what you can make growing any other crop/plant. The distributors will continue to lower prices to be competitive until the profit margins start to shrink.

  6. Keith Hyne

    June 23, 2015 at 7:26 am

    I pay $ 300/Oz for Blue Dream
    And other medical strains

  7. Glenn Dowdy

    June 23, 2015 at 4:19 am

    Here in northern lower Michigan we pay $200.00 – 225.00 for an ounce of good bud, or we can get cartel weed for about 100.00 – 120.00 an ounce. But the dispensaries are charging 300.00 and up for medical grade.

  8. Mark Russell

    June 23, 2015 at 3:55 am

    $100 a quarter, $50 an eighth. Pretty standard on the street in a state where weed is not legal in any form.

  9. Hipbilly

    June 22, 2015 at 9:42 pm

    $30 an eighth at the despensary I go to

  10. richoe

    June 22, 2015 at 7:17 pm

    up in maine its about $220 an once and 40 an 8th. maine has really good tree all over.

  11. Shannon Silva

    June 22, 2015 at 6:46 pm

    I pay 175 an oz of white widow just as good of not better than the dispensaries.

  12. Amber

    June 22, 2015 at 6:41 pm

    Lately ~
    165-200 Oz
    10 a G
    65 for 7

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