Washington State Marijuana Prices Plummet

Recreational marijuana prices in Washington State have fallen by more than 50% in the last 18 months, helping the industry compete against the black market but also introducing new challenges for licensed cannabis businesses.

The reason for the price plunge? A deluge of new retailers and tax changes are forcing stores to cut prices in an effort to increase customer traffic and sales, the Longview Daily News reported.

When the recreational marijuana market launched in July 2014, the average price per gram was between $25 and $30. Now a gram costs on average just under $10.34, according to report.

Several retail stores told the Daily News that their profits suffered after a 37% point-of-sale tax replaced a 25% tax that was charged to producers, processors and retailers.

Competition is bound to get stiffer, as Washington has authorized up to 222 new retail licenses as part of its move to fold the unregulated medical marijuana industry into its recreational program.

This week, the state Liquor and Cannabis Board will announce new emergency rules for the additional licenses.

At least one retail store manager, Hollie Hillman at Freedom Market in Longview, doesn’t expect prices to fall too much more since some strains of licensed recreational marijuana are already down to black market prices of about $7 per gram, according to the Daily News.

5 comments on “Washington State Marijuana Prices Plummet
  1. Moonlight Alchemy on

    Just FYI, when the price of a commodity plummets, its the producers of the product, not the retailers, who pay the biggest price. Its actually quite humorous to hear retailers complaining about too much supply….. The tax change actually didn’t effect profits for retailers because the prices charged per gram from P/P dropped drastically without the 25-25-25 tax structure in place, and retailers are paying much less in federal tax now because of this new structure. New stores won’t be coming on line for 3-6 months at the earliest. In sum, rec. stores are in a better situation right now than they’ve ever been in… I wish I could say the same about our rec. farmers!

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  2. yeah on

    Check your facts. This site seems to have become a mouthpiece for the Wasington Marijuana Retail lobby. Retailers DID NOT suffer from the tax change, they actually increased their after tax margins. The 37% is paid by the CONSUMER, not the store, the store just collects it and passes it on to the state. Because it’s a sales/excise tax it never hits their books so that income is NOT taxed by the feds. This effectively lowered the tax burden on all retailers and increased margins. Retailers then gathered together to demand that producer lower their prices because “Producers got a 25% tax break”. There needs to be some honest investigation and journalism done around this issue or the entire system is going to fail.

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  3. clark_G on

    “Washington St. marijuana, a market created from scratch that’s a shining beacon of success for the nation,” said Nobody Ever. Let’s get to the core issue here: Oregon did it better. This story is based in Longview, WA which is just across the border from Oregon. Stores in southern WA got a lot of cross-border traffic from OR before OR set up its legal system, and now it’s drying up. When building its new system Oregon looked at all the avoidable mistakes WA rule-makers made (looking at you LCB) and decided Colorado’s model was smarter. Our neighbor to the south made their system unlike Washington’s and they’re reaping the benefits now. OR went with medical market absorption rather than attempted elimination, made the tax much lower, allowed vertical integration for grower/retailers, listened to, and crucially, acted on advice offered by the existing business community, etc. This story is simply Oregon’s superior state system flexing its muscle over neighboring businesspeople trapped in a dumb and greedy state. It’s a money sucking armageddon for tons of entrepreneurs who had optimistic dreams a couple years ago, and it was all avoidable! Colorado’s proof. To my fellow citizens, this is not natural or normal, and we shouldn’t stand for it! Washington’s traditionally been an incubator for new and better things, whether its big trees, apples, cherries, hops, wine, Boeing jets, Starbucks, Amazon, or Microsoft. We deserve far better than what we got. No farmers, no buds!

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  4. Tiego on

    It sounds like WA prices are starting to fall in line with Canadian prices. We’ve had $10/g, $25-30-1/8 and 50-60 1/4 for the last 2 decades, and with dispensaries around they’ve kept the pricing the same. There are 120 dispensaries in Vancouver selling at these prices and everyone’s still making money. $25/g is insane.

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