In what’s good news for weed lovers living in or visiting the Centennial State, the price of marijuana has steadily dropped in Colorado, giving smokers more cabbage for less lettuce. The reasons surrounding this drop are interesting and go beyond basic economics (ergo, they’re not quite as boring). While Supply and Demand plays a role in the cost of cannabis – just as it plays a role in the cost of everything else – it’s certainly not the only factor. It turns out, many variables are at work, making those in Denver able to get their Mile High at a much lower hit to their checkbooks.
The Street Factor
Before the legalization of recreational marijuana, Coloradoans procured cannabis the same way anyone in an illegal market does: they bought it off the streets. This isn’t to say that everyone shopped around from alley to alley looking for the best deal and least rabid racoons. Most people simply knew someone who knew someone who knew someone. Plainly, finding a seller never proved all that difficult.
When Amendment 64 legalized recreational weed, citizens assumed that the street sales of marijuana would disappear, illicit dime-bags discarded on the side of the road like laser discs and cans of Crystal Clear Pepsi. After all, no one’s really sold homemade toilet wine out of their bathroom since Prohibition was repealed. But, street weed didn’t disappear for one reason: the cost of legal weed was much higher than getting it elsewhere. Why walk into a dispensary with your VISA card when you can buy an ounce from your brother-in-law for much less?
It became clear that budtenders weren’t going to put bud dealers out of a job unless their prices were on par. This might have helped the cost of legal cannabis fall a little, but it wasn’t the main factor. It’s simple: marijuana is a for-profit business and businessmen and women don’t go into it hoping to break even. But, dispensaries learned they had to lower their prices somewhat if they wanted to up their clientele. Having customers pay less was much better than having no customers at all.
Supply and Demand
As mentioned above, it’s hard to discuss economics without discussing the concept of Supply and Demand. Essentially, the cost of any given item is determined by the demand juxtaposed against the supply. In essence, things that are rarer are worth more than things that flow freely. When Tickle Me Elmo suddenly became all the rage in 1996, the existing inventory sold quickly and made him almost impossible to find on a department store shelf. This drove up the cost considerably, with some folks shelling out 1,500 dollars so that little Sally wouldn’t spend her Christmas trying to stick her head inside her Easy Bake Oven. Normally, the toy retailed for around thirty bucks.
While the above is an extreme example, it demonstrates perfectly how Supply and Demand works and pot is not immune to this. In 2014 Colorado, recreational marijuana was in its infancy and, as a result, people were just beginning to figure out the market. There weren’t a ton of choices either: shops opened slowly, allowing them, for a time, to be the only kids on the block. This gave them the option to sell at higher prices as the supply was limited.
Today, there are over 200 retail dispensaries in the Denver metro area (as well as three hundred others elsewhere around all of Colorado). So, the tables have turned and the supply, while not necessarily greater than the demand, is able to at least keep up. This decreases prices: if one pot shop charges too much for an ounce, customers will go to a shop that isn’t as expensive.
In other areas, such as Massachusetts where medical marijuana is legal but recreational is not, the prices of prescription cannabis remain high because the number of businesses selling it are low. Simply, consumers don’t have other choices, or at least not ones they can reach conveniently.
Edibles and Wax
While cannabis flower prices are dropping in Colorado, not all marijuana products are experiencing a decrease. Edibles and wax are two products somewhat immune (at least to drastic changes). One reason for this is the lack of street competition. Edibles can be made by the layperson, but it takes patience. Cannabis wax, on the other hand, is something that is very difficult to make, often resulting in third-degree burns rather than first-class batches. In short, it’s dangerous to produce. It’s also dangerous to ingest when made by a novice: the butane used in the creation process isn’t always filtered out properly.
Besides, even if edibles and wax were simple and safe enough to make in your kitchen, consumers aren’t likely to flock to the black market, waving their billfolds over their heads and asking for product. There’s just something creepy about buying a pot brownie from someone walking up and down Colfax Avenue. Many of us, in fact, grew up in eras where we were taught not to even eat homemade Halloween treats because they always contained razor blades. Like 100 percent of the time.
Edibles and wax are also experiencing a high demand, particularly right now. People want them and they’re willing to pay even if the price is higher than they’d like.
Concentrates, like hash, shatter, and wax, appear to have the most stable price point. The cost of edibles has fallen a bit (though nowhere near the amount of flowers), but the cost of concentrates has risen.
Want to Get High? There’s a Website for That
Of course, the internet plays a role in the price of cannabis as well. Social networking outfits and other sites, such as MassRoots and Wikileaf, have popped up all over the World Wide Web, allowing consumers to window shop from Windows Ten. People compare deals, check prices, and learn about the inventory at a specific pot shop with little effort. Several apps even exist. All of this speaks to competition: Colorado dispensaries who want to keep up must entice their customers in some manner. Often, the simplest answer is lower prices. But Denver Bronco tickets might do it too.