Prices up for wholesale flower in both newer and mature medical cannabis programs but leveling off

(This is the tenth in a series of stories from Marijuana Business Daily examining wholesale prices in U.S. marijuana markets. The first nine installments focused on recreational cannabis. Part 1 covered Nevada, Part 2 Washington state, Part 3 Oregon, Part 4 California, Part 5 Colorado, Part 6 Alaska, Part 7 Michigan, Part 8 Illinois and Part 9 Massachusetts.)

Across the United States, medical marijuana business owners are reporting firm prices for wholesale flower, although actual price levels vary widely and largely depend on a market’s maturity.

New programs such as Pennsylvania and Ohio are seeing top-of-the-market dollar figures for flower, bolstered by a growing number of new patients entering the markets.

By contrast, older programs have seen MMJ prices level off along with demand for product.

Marijuana Business Daily surveyed several growers, analysts and business owners in Arizona, Pennsylvania, Colorado, Massachusetts, Illinois and Oklahoma to determine:

  • What they’re getting for their wholesale pounds of cannabis.
  • How supply and demand are playing out in their state.

Below are excerpts from the interviews.

Sara Gullickson, CEO of cannabis consultancy CannaBoss Advisers, Phoenix

Gullickson holds MMJ licenses in four states. The medical cannabis prices she’s seeing per pound of flower wholesale are:

  • Arizona: $2,400 for top shelf
  • Michigan: $1,500-$1,600
  • Ohio: $3,000-$3,200
  • Pennsylvania: $6,400-$7,000

Sara Gullickson

For Pennsylvania, Gullickson said she spoke with several people who confirmed that “astronomical” amount. The state has limited licenses and strong demand among patients.

She views the wholesale MMJ market as increasing in price as you travel from the western side of the country to the eastern side, with  the newer markets more expensive.

Regulations and the number of licenses also influence that price. The fewer the businesses, the lower the supply and higher the rates for flower. 

“Demand has gone up,” Gullickson said. “It’s not a bad time for marijuana.”

Michael Bronstein, co-founder and president of the American Trade Association for Cannabis and Hemp, Philadelphia

Michael Bronstein

Bronstein said demand has been strong for medical cannabis during the coronavirus pandemic.

“From a marketplace perspective we’ve seen operators and businesses stepping up to meet this demand for the industry and the country at large,” he said.

As far as further expansion, Bronstein said that newer markets should continue to grow if the state’s population is large and includes an extensive condition list.

But, he pointed out, some older markets such as Arizona and New Mexico have seen their growth stabilize or slow.

Andrew Livingston, director of economics and research at cannabis law firm Vicente Sederberg, Denver

Andrew Livingston

After watching the Oklahoma MMJ market for a year and a half, Livingston pointed out that a state’s MMJ regulations determine a market’s economic potential.

He expects to see further growth and expansion in Ohio, Pennsylvania, Maryland and Missouri, though that growth will slow eventually.

By the time the patient enrollment eases, those states should have adult-use cannabis laws, Livingston predicted.

Ted Rebholz, CEO and founder of Temescal Wellness, Framingham, Massachusetts

Ted Rebholz

Wholesale MMJ flower is going for around $4,200 a pound on average in Massachusetts, which is approximately 25% higher than twelve months ago.

Demand continues to outstrip supply, because of the slow pace of approvals by the Cannabis Control Commission.

Moe Asnani, director of Downtown and D2 dispensaries, Tucson, Arizona

Moe Asnani

High-quality indoor flower is selling for $1,800 to $2,200 in Arizona, which is about 20% higher than a year ago, according to Asnani.

Supply is up as large-scale facilities improve production capabilities, but demand is also up because Arizona has more patients in the system and all the illegal delivery services were removed from the internet as of Jan. 1, 2020.

There were 100-plus unlicensed listings in Arizona online, according to Asnani.

Eric Dangler, CEO and co-founder of Eufloria Meds, Tulsa, Oklahoma

Eric Dangler

Retail-quality flower is wholesaling for $1,200-$2,200 depending on quality and volume in Oklahoma, according to Dangler. That’s down from a year ago, when prices were $3,200-$4,500 a pound.

“(A year ago) it was nearly impossible to find,” Dangler said. “I had a grower call me and tell me he was getting ready to pull a harvest that would be $3,500 a pound. Turned out to be he was harvesting one plant.” 

Supply is up with over 4,500 grower licenses and no limits on licensing, he added. But retail demand is also up because there are more medical marijuana cards issued each week.

Chip Paul, chairman of Oklahomans for Health, Owasso, Oklahoma

Chip Paul

A pound of top-shelf flower is wholesaling for between $2,000 and $2,250, and mid-tier quality is selling for $1,750-$2,000 a pound, according to Paul.

That’s down about $250 a pound down from last year.

Supply is up as the market is still developing and more growers are coming online, he added. 

Sammy Dorf, chief growth officer and co-founder, Verano Holdings, Chicago, Illinois

Sammy Dorf

Prices vary, but about $3,900 a pound for MMJ flower is normal, Dorf said, which is similar to this time last year.

Supply is up as production capacities have increased, according to Dorf. Demand also has increased.

“With adult-use coming online in Illinois there has also been steady growth in patient count,” he added. “More patients equals greater demand.”

Kylie Safa, chief operating officer, Ultra Health, Bernalillo, New Mexico

Wholesale flower is selling at $2,000-$2,400 per pound while trim and shake are selling for $600-$700 per pound, Safa said. 

Kylie Safa

Compared to a year ago, prices have remained relatively flat despite a steep jump in the state’s patient count. 

At the same time, New Mexico  growers haven’t seen dramatic wholesale price drops, largely due in part to the state-mandated plant limit, according to Safa. 

In August 2019, a new plant count of 1,750 per producer went into effect. 

Previously, MMJ businesses were operating at a maximum of 450 plants per producer.

“Yet we still haven’t seen relief on pricing for wholesale or retail cannabis,” Safa said. 

Demand is also up on an increase in patient enrollment over the last few years.

In February 2018, 49,000 patients were enrolled in the program. Today, about 83,000 patients are enrolled, which is approximately a 68% increase. 

“We expect to see demand continue to outpace supply until there’s more product available for patients,” said Safa.

Bart Schaneman can be reached at [email protected]

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