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Legal Recreational Marijuana Prices Starting To Drop In Washington, Finally

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marijuana cash industry bankingLegal recreational marijuana sales started in Washington State about three months ago. Anyone who has bought marijuana at a recreational marijuana store has probably suffered from sticker shock. As recently as last week, prices for one gram of legal marijuana were as high as $38, and the amount of strains available were limited. That seems to be changing now, as more growers are harvesting and many strains have lowered to $20 per gram. One store, Main Street Marijuana in Vancouver, is at capacity for product. Per The Columbian:

Ramsey Hamide grinned as he leaned back in his chair, looking out at piles of palm-sized plastic bags stacked in containers in the back room at Main Street Marijuana.

For the first time since the store he manages opened three months ago, Hamide found himself in an entirely unfamiliar situation. With two safes bulging and a table packed with product awaiting sale, Hamide couldn’t accept any more product. In fact, on that Wednesday afternoon last week, he found himself turning some growers down.

“We’re pretty much at capacity on what we can store here,” Hamide said. “We’re full. I can’t take anything more until we sell this.”

I hope to see prices continue to drop. In order for marijuana legalization to work, it has to do what supporters have always claimed – limit the black market. However, at $38 per gram, or even $20 per gram, that’s not going to happen. Hopefully price gouging is a thing of the past in Washington. If not soon, Washington stores may be forced to do so if/when Oregon legalizes marijuana. Oregon is projected to sell marijuana at $5 per gram.

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  • Nathan

    Do you know that the prices would be if the tax rate were dropped to those of alcohol?

  • MrBaked.com

    how much would it cost to start a dispensary

  • pinhead

    I am basing my statement on all of the qualifications and experiences described above.
    And you are right in a way. If you own a high volume Dollar Store or an espresso stand, or a real estate brokerage, then yes, you are probably clearing more than 2%.
    Just to be clear, I am talking net margins here, not gross margins, right ?

  • Dan

    What are you basing your statement on? I can name several small businesses that profit well over 2%. I think you need a new profession, if managing 2% margins is your thing. I wouldn’t hire you to alphabetize my books, let alone manage them.

  • David

    Yeah the supply issue is a mess because now the outdoor grow crop is ready to go without enough retail stores opened to sell their product to. It’s a chicken or egg thing. The Washington tax structure is crazy but the state and LCB (which regulate the I-502 stores) are just in it to make as much as they can in the short term. By the time Oregon’s retail stores are opened in 2016 Washington’s Native American tribes will be selling super cheap high quality cannabis on tribal land. There is a lot of that tribal land located in Washington. You’re right when you say we shall see. Interesting times. Thanks for the reply.

  • OzzyBreadWinner

    Importing and exporting of anything bought in Oregon for intended use in Washington without paying Washington’s sales tax is “banned”. You’re not supposed to buy beer or cigarettes in Oregon and use in Washington. But, practicalities say that what’s “banned” and what happens are two different discussions. It’s foolish to assume that the economics of Oregon won’t in any way affect that of Washington, especially when the market as a whole is still trying to find its equilibrium price. In Washington, since writing this, prices have dropped to the $10-$15 a gram I projected for Oregon. I haven’t studied Oregon’s tax code but when I wrote this I was going off of other projections I had read. As I have garnered, it’s a flat $35/oz ,which is, if scaled proportionally (which may not be the case..) around $1.25/gram.

    Meanwhile, in Washington..it’s a 25% tax to the wholesaler, and a 25% tax to the retailer. If prices can be as low as $15, that means the real cost of production is around $8, before tax. Adding Oregon’s $1.25 tax, and around $10 seems appropriate. In any case, it seems Oregon’s weed will be around $5 cheaper/gram…simply because of the tax structure.

    But the market is still balancing out, so we shall see.

  • OzzyBreadWinner

    It ran out like two days after it opened, if I recall correctly.

  • E.

    Anyone know the price a producer sells his flowers for? weight/currency

  • pinhead

    That sounds like a contentless reply.

  • pinhead

    What do you base that statement on ?
    I have seen the books of several llcs and have managed a number of small businesses (($750k to 1.5 million per year) so I base my statement on that,
    I also know, when writing a business plan or applying for a business loan, that margin is considered an industry standard. But I am open to hearing what you have.

  • Bongstar420

    For the uninsured or those without brains and a back bone.

    Its pretty easy to grow poppies and isolate Morphine sulfate from it.

    The high prices are because of drug addicts and their lying ways in addition to a cultural dogma from the protestants though you would be hard pressed to find a culture that didn’t ban some other cultures drugs.

  • Bongstar420

    Because they expect others to labor for their benefit when they couldn’t do it them selves (assuming there are no bans on personal production).

    They are perfectly welcome to start businesses and show us all how its done.

  • Bongstar420

    No one has stopped any of these people from paying taxes, getting their stuff analyzed, or running actual businesses except for their lack of desire to fund political action.

    How much has the medical growing community funded legalization again?

    How good is your friend if there has to be laws keeping the big boys out of the game for you to secure their business? Why be concerned about big business if they aren’t actual competition because you friends support you?

  • Bongstar420

    Doesn’t matter. The point is that it *would.* Did you ever think that the people running the show want to discourage the bottom class from spending their days ripped out of their gourds?

  • Bongstar420

    I don’t believe LLC’s are working on 2% profits. Thats absurd.

    I’m running a grow and selling to dispensaries. Its not like I’m some outsider. The guy I am selling to is doing well on a 1.7x markup (I like more exclusive relationships with my distributors).

    We may not have a cannabis tax in OMMP, but thats the only tax that isn’t there. I do have to give nearly as much as the tax to patients before I can earn a living, and I do have to live on half of the net after all the costs you’ve mentioned. Do you understand? I live off of half as much as other growers after taxes and costs.

  • Bongstar420

    As if we are being objective about this….LOL

  • Bongstar420

    So the odds of accurately labeled Vicoden are exactly the same as accurately labeled Rhodiola extract?

    Additionally the chemical variability is exactly the same between Vicodin vs Rhodiola extract (~5% change in chemical composition for all sources)?

    http://www.nytimes.com/2013/11/05/science/herbal-supplements-are-often-not-what-they-seem.html?pagewanted=all&_r=0

    Do you know that most herbs and vitamins are mislabeled? Do you know that 5-10% if herbs and vitamins have unsafe levels of Lead for example?

    Your free market theories rely on informed and competent individuals. Most people are not that. Heck, they barely understand in depth labeling even if they are accurate.

    We are talking about markets, not individuals ability to produce their own plants. Plus, you ignore Morphine and Cocaine. Are you trying to say that people should be able to produce unregulated quantities of Morphine and Cocaine just because they are plant sourced?

    I’m for not “needing” to be sick just to get drugs and also for highly regulated production if you are going to buy, sell, or trade. Regulations do not apply to individuals producing exclusively for them selves (which means they do not give any to anyone for any reason).