Marijuana prices may start to rise again

Since the recreational marijuana market was opened in Washington, consumers have seen volatile fluctuations in prices. Though these pricing inconsistencies were anticipated, they will still have lasting consequences for those involved in the production, processing and retail of marijuana.

Last year, when the first stores opened, prices for a single gram of weed could reach up to $35. Currently, prices of marijuana have dropped to anywhere between $10 to $25 a gram according to a sampling of prices listed on Leafly.com, an online resource for information about cannabis.

Dominic Corva, executive director of the Seattle-based Center for the Study of Cannabis and Social Policy, said these fluctuations are anticipated to be temporary.

“What we’re seeing right here is a totally normal dynamic with the creation of the I-502 market,” Corva said.

I-502 refers to Initiative 502, the 2012 voter-approved law that laid out how a recreational marijuana market would function, including taxation, regulation and enforcement guidelines.

Recent harvest drives down prices

Corva said prices are low right now because of the recent harvest coupled with a shortage of retail stores selling marijuana and marijuana products. Currently, there are around 70 stores in Washington, but many more producers and processors trying to sell their crops and processed products.

“What follows the bounty is a process whereby that oversupply dries up,” Corva said.

Crops were harvested largely by December. The corresponding drop in prices across the state is mostly a result of that harvest.

Corva said prices will likely rise as consumers continue to buy up product and stockpiles decrease ahead of another crop harvest.

By next winter, Corva said, the prices in the market should stabilize, settling into their long-term price patterns.

However, many producers and processors may not survive a year. In fact, the future stability of the marijuana market may be a result of many current producers and processors dropping out of the market.

Corva said the Washington State Liquor Control Board, which oversees regulation and enforcement of I-502, anticipated that around 50 percent of recreational marijuana businesses would close within the first year of legal sales.

A spokesman for the Seattle Cannabis Association (SCA) said the legal market for recreational marijuana is relatively profitless for many participating businesses. He said their costs for compliance and testing may even be increasing. Those increasing costs will pile up and decrease revenue even more.

Both the SCA spokesman and Corva agreed that many marijuana businesses didn’t anticipate the full extent of price fluctuations in a developing market.

If these predictions hold true, consumers can expect to see an increase in retail marijuana prices. Prices eventually may settle around where medical marijuana prices used to be.