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.