Aug 252014
 August 25, 2014

colorado price legal marijuanaLegal marijuana is expensive in Washington State. This last week, prices reached as high as $30 per gram. That works out to $840 per ounce. I have never heard of someone getting $840 per ounce, no matter how good it is. But, I guess if people are willing to pay that much, let the invisible hand of economics carry on. Still, I think the legal recreational marijuana industry needs to scale back prices. If store prices are multiple times more than street prices, it could come back to haunt the industry.

There’s a lot of blame being thrown around in Washington State over the high prices. Per Koin:

The store’s owners blame the price shift on growers and processors, who they say are taking advantage of low supply and high demand.

“The growers that got us initially, they’re the ones that we’re not gonna plan on dealing with,” said Hamide.

Now, Hamide and five other stores are teaming up to from a retail association that will give them some clout at the bargaining table with growers.

I think that as more stores open, and more growers and processors get licensed to operate, prices will come down. Right now there is simply too much demand and not enough supply. But it’s still disappointing to see people taking advantage of the situation. It’s also sad to see people willing to pay such high price tags. But, if that’s what they want to do, that’s what they want to do. If Washington allowed home cultivation like they do in Colorado, and will in Oregon, it would help fix this problem as well.

Comments

comments

About Johnny Green

Dissenting opinions are welcome, insults and personal attacks are discouraged and hate speech will not be tolerated. Spammers and people trying to buy or sell cannabis or any drugs will be banned. Read our comment policy and FAQ for more information

  49 Responses to “Washington Marijuana Stores Team Up To Fight Price Gouging”

  1.  

    Those prices are bullshit there is no reason for legal marijuana to cost so much more than black market buds.

    •  

      The dead hand of government.

      •  

        No, he’s right, this isn’t caused by “taxes”.

        •  

          Of course it is. Limit the number of legal suppliers. High taxes. Together they cause high prices. Only the government can violate the laws of supply and demand.

        •  

          Limit supply. High taxes. The dead Hand of government.

        •  

          over regulation is exactly why legal pot is so expensive. it’s taxed 25% each time it changes hands, it has to be tested for “dangerous molds”, and the state gets to pick and choose who gets to grow it, process it, and sell it. the free market simply doesn’t exist where legal pot is concerned. let’s look at what it takes to actually grow and process pot…. minimum 2 / 3 mos grow time, 2 weeks dry time, trimming the goodies (hand trimming is still the best method), 3 / 4 weeks cure time or more… let’s not forget nutes, lights, fans, ect… and the cost to operate… throw over regulation into the mix and the black market will continue to thrive. the prices will drop a little while the outdoor stuff passes through the market but once it’s gone the prices will increase again. the only solution is to de-regulate and allow the free market to self regulate… there would be more supply to meet the demand and prices will drop.

  2.  

    You hearing this Blewett pass, CannaMan. Your selling to the highest bidder WILL be the bane of your entire operation.

    •  

      So if you work for a living you should take the job that pays the least for the work? Really?

      •  

        Is that what I said? Not even close.
        Let’s try to put this in perspective by using the topic we are discussing instead of going with broken comparisons.
        What business that is in this for the long haul would open up on it’s first month and pretty much loudly say “I am going to make as much money as I possibly can in the short term to everyone’s detriment except for me, oh and hey, if you need more you know where to find me”.
        I don’t know about you but that looks like a sure fire way to get boycotted by your customers. And guess what this article is about, that very same thing happening. Who would have seen that coming? Well, myself and several others I know have already boycotted them at the consumer level. Not surprising that the retail end is fed up and following suit. I applaud them.
        Greed is not the way to build a loyal following, it has really never worked, why would it be ok now?
        Any other on topic questions for me?

        •  

          High prices draw in more supply. So if prices spike because of demand you get producers flocking to the market. Or sellers who will make every effort to make that delivery when conditions are very bad – because it is profitable. And pretty soon you get a glut. And prices go through the floor. Limiting prices actually slows market correction.

          Taxes are the bigger worry. Government has an unlimited appetite. Sellers are limited by what some one is willing to pay. The government guys have guns. Or hadn’t you noticed?

          •  

            All very true, but you are forgetting the balance to capitalism: the consumer. Yes, the government has guns. So do many citizens of this country (or hadn’t you noticed). Why is this even relevant to a price gouging conversation?
            The taxes are no surprise either, it was in the voted draft of the propsition (I-502). Only thing noteworthy in that context is it is a percentage of sales. The higher the sales price the higher the tax. If you dislike the amount of tax the state is bringing in then boycott price gouging, consumer. I’m not advocating limiting the prices, I’m advocating that the consumers correct the market which is what is happening here locally and beyond by the looks of it.

          •  

            Because the government bypasses the market with force. It is the guns in service to the implementation of laws that is the problem. Our Declaration of Independence is full of such examples.

            And yes. If I was in a legalized state and the prices were too high I’d go for black market supplies. Until the state found a tax rate that maximized its income.

  3.  

    Prices started high in Colorado (sorry) although we never saw anything close to $30 per gram, but have steadily dropped since legalization began. On January 1st, there was a huge difference between the price of medical and retail cannabis, but prices are now about the same in some stores. Of course, taxes on retail sales make retail product much more expensive, but I suspect taxes will be adjusted downward when state officials eventually figure out they would generate more tax revenue by reducing the rate, especially for Colorado residents.

  4.  

    Problem is the LEGAL growers who dont have to worry about getting busted are charging the same price as the black market. Then the 75% tax is added on to it before it gets in the store. Why is this happening?

    •  

      Government likes cartels.

    •  

      Because they still want to get a reasonable price for their product and black market prices are in line with the cost of production. A lot of new growers are probably realizing that they need to scale up to much larger grows to actually make a profit after equipment, time, nutrients, rent and utility costs.

      •  

        “black market prices are in line with the cost of production.”
        Not at all. Marijuana growing is a high profit business. After initial seed and equipment costs, which are minimal, the electricity and nutrient reqs are insignificant in comparison to the amount of plant that can be grown and sold. Trust me on this…blackmarket value is FAR above production cost.

  5.  

    This is happening in New Mexico also, and particularly with the edibles. In every state where it’s been legalized for medical consumption the state departments overseeing the entire program should step in and invoke some price regulations. If this doesn’t happen the greedy producers are going to force patients back to the streets, and then it will be downhill from there. The street dealers must be laughing all the way to the bank as they watch the slow implosion.

    •  

      Price regulations = government supporting its favored cartels – if they set prices too high. If they set prices to low there will be nothing to buy. The market does a better job setting prices than government ever can. Unless you are nostalgic for the USSR.

  6.  

    It seems that it stores can’t keep product on their shelves long enough to stay open for longer than a day or two, then they are forcing customers to the black market anyway.

    The market hasn’t begun to take hold and already retailers are taljing about price fixing – as if 5 little stores that don’t have enough product to stay open for longer than a few days anyway are going to affect the black market.

  7.  

    Prices are supposed to spike when demand is high relative to supply. It is self correcting if government gets out of the way.

    •  

      I feel like the bigger issue at hand is the triple taxing of this product at the grower, dispensary and again at the buyer! And at the outrageous amount of 25% that’s the highest tax on a product anywhere!!

      •  

        I absolutely agree. Taxes on weed are way too high.

      •  

        It won’t matter when it’s $10 an ounce.

        •  

          Exactly! When was the last time anyone complained about the taxes on something affordable? The high retail prices are the only reason the taxes are noticeable…

      •  

        I think the high taxes were a way of getting it legalized. There are a fair number of people who think it should be taxed super high and would vote for it.

        Pot prices in Colorado are down near black-market levels. Not as low as I-know-the-grower prices but still low enough that I would buy some. Here in Washington prices are still way too high.

    •  

      The government needs to license more growers so there’s more supply.

      •  

        Does the government license tomato growers? I agree with you short term. Long term we have to get government out of – nearly everything.

        He has erected a multitude of New Offices, and sent hither swarms of
        Officers to harrass our people, and eat out their substance.

        •  

          I’d almost agree with everything you’ve stated, but tomatoes don’t contain THC or CBD’s. It will come to pass one day though, that cannabis will be growing next to tomato plants nearly in every garden, but only when the government wakes up.

          •  

            Cannabis before 1937 contained THC and CBD. It was unlicensed. I’m a conservative. I prefer the pre-1937 regime. See – Cab Calloway-“Smoking Reefers” and Cab Calloway – Reefer Man (1933) – a song from the 1933 comedy “International House”.

            I am tired of regulators and SWAT teams breaking down doors to control things.

        •  

          I completely agree with you there. Though the government does license breweries and distilleries.

          •  

            Yes. It was traditional. Cannabis was unlicensed until recently. Before 1937 nothing. I’m a conservative. We should revert to the pre-1937 regime.

        •  

          That is not a legitimate argument. If your buddy can’t handle his tomatoes you don’t have to take his car keys. This problem is the fault of Christine Gregoire for vetoing the dispensary portion of the medical pot regulation in 2011.

          •  

            Well until 1937 it was not a problem and cannabis was treated just like tomatoes. I’m a conservative. We should go back to what we had before all the laws against cannabis were enacted.

          •  

            It’s not 1937 anymore.

          •  

            Right! I like my widely available antibiotics and slightly more hidden race discrimination in 2015. But with legal gay marriage in US and legal weed in my state… I hope the progress spreads.

        •  

          There’s nothing wrong with government oversight and licensing, the problem is having a limit on the number of licenses given out. If anyone can get a license as long as they meet the criteria, and there is no max cap in place, the free market can operate and enable new competition to match the demand, thereby keeping prices down. Nothing wrong with regulation, as long as it comes without limitation.

          •  

            There is nothing wrong with it if you like ENFORCERS. Much better is when a private organization like UL handles the matter.

            BTW regulation is how the big boys keep the little guys out of a market.

            And then there is regulatory capture where the regulated control the regulators. Private regulation is more honest. Because the regulators can be sued effectively.

      •  

        LAWL, man. hahaha

    •  

      Self correcting except ahem, from all the retailers and profiteers in between marking it up too? Prices are what they are but were set from already then sinful MMJ (taxless) prices. It doesn’t need self correcting.

      It needs people supporting the shops that PASS ON SAVINGS TO THEIR CUSTOMERS. so the ones who charge more, die out. I guess if you live in a town that only has 1 or 2 shops ( as I do now)… well man guess find a better hookup but you’re boned!

  8.  

    I am a Tier 2 Producer Processor and I believe the anger projected at growers/producers is completely misplaced and retailers are lying to their customers. We sell for 10-12 a gram at the processor level, yes that is high, but so is demand and our products fly off the shelf. Retailers, ones we no longer work with, are marking the same product they bought from us for 10-12 a gram to 28 – 36 a gram. THAT IS GOUGING. Retailers marking up product 200% – 300% is ridiculous, them turning around an blaming it on growers is an out and out lie. They can choose to sell it for 20 a gram and or less, they can pass it through to consumers for the same price they bought it for and make all their money off of pipes and bongs and other stuff. , Retailers are choosing the greedy route, then don’t have the balls to be honest about what they are doing. Don’t blame the growers, this is all the retailers issue. Taxes are an issue, but they are not to blame. Next time you purchase something from a retailer demand the price they buy it from at wholesale and see who is

    •  

      $10-12/g at the processor level certainly isn’t helping anything. In a legal operation $5/g at the grower level is plenty to make a huge profit. If a legal operation can’t match illegal street prices, there’s something seriously wrong with your business model.

  9.  

    I have a retail general store in a small town. The only store in town. I wish I had a product that flew off the shelf that I made 100% or more profit. It seems the producers are investing time and money. Cannabis takes 90 days to grow. Then it takes a week to cure. Then it must be lab tested. Then the processor packages the product for resale and delivers it to the retailer. The retailer opens their doors and sale all the product in hours. Of course they should double and triple their money. I think that if the growers were charging 7 dollars a gram the retailers would not drop their prices. This is where the price gouging is happening
    I sell national named beer at a 25% margin. All The big boy corporate names in my store I make 25% margin. My milk is a good mover and I make pennies per gallon. i would be willing to bet these same companies that are producing these products are making three to four times the profit that my retail store is.
    I do agree the prices are too high, The taxes are too high. The only good thing is that we now have legal marijuana and soon it will be widely available. Producers and retailers should work together for the advancement of the industry.

  10.  

    I live in Vancouver, WA and the prices are currently as of today 9/21/2014 $135 for 3.5 grams of weed. A few strains were ONLY $60 for 2 grams. This has made me against legalization in any form, if you want MJ stick with the medical cards. It might not be good for the tax money, but who the hell can afford a $30-50 joint?

    •  

      Giving people the option to buy from the corner shop instead of the black market is probably about the _only_ thing that we have going for us in the fight -against- the worldwide war on drugs. If you have a friend or someone you can buy from that’s fine you won’t have that option taken from you. Weed prices are outrageous for the most part everywhere… so I am with you!

  11.  

    There’s plenty of supply, it’s just bypassing the legal market and going to a booming delivery sector has opened up. MMJ is thriving. Regulations need to be equalized in the two legal and one illegal market. Or economies of scale will eventually tip the balance as serious procurement analysts start working for big cannabis.

  12.  

    Its ridiculous, Ill keep getting it off the books as long as I can, paying higher than $10 a gram should be a crime. It needs to be unrestricted so we can just buy from private, good producers just like you would buy veggies from an organic farmer.

  13.  

    I live in CO and a lot of people are still trying to gouge customers at dispensaries. Medical Cannabis has been around for a while here and it seems that the prices were set by that for a while. Before A64 opened retail shops in 2014, $45 for 1/8th seemed to be the standard price for good bud in shops or on the street (generally, w/e). People were charging $60 for 1/8th on Jan 1st for top shelf bud like golden goat (after people stood in line for 3 hours)… and now a lot of shops still try to keep that kind of fleecing business running.

    There are shops in Denver that sell $30 for 1/8th of golden goat or Chernobyl on “summer sale” but it has been going on through the winter. I recently moved to Colorado Springs and it gave me some perspective on why some places charge more than others. in CO Springs retail shops aren’t allowed (only med) but t here’s a nearby town that does allow rec. There they charge $45-60 (before taxes, if you’re retail it’s like 20 something or more %) for Bruce Brainer, Blue Dream, or top shelf stuff for 60.

    The place that has the really cheap summer sales in DV is owned by a growing company, and I talked to someone at one of the retail only shops where i live now and turns out they buy their product from a middle man or another dispensary, and you don’t see $30 18th’s there.

    I could use the $20 to top off my gas tank, drive to Denver and buy an eighth for $30, and after driving back have enough money for a meal. It is criminal to be charging people this much – and it sounds like you guys in WA – and we ALL know it’s their profit margin they are keeping high – get way worse off deals.

    I can’t blame shops if they are getting product already marked up but, anything $12/g and above is some people along the line being – you guessed it – greedy. But if there are places selling product from a middle man, that means at least 3 people are marking it up for profit before taxes. Demand is sky high, and i don’t believe for one second there is any lack of supply to meet that said demand. And, after all, weed grows like a weed now doesn’t it?

    I’ve heard a couple of those unwisely talkative greedy folks said they were in the dispensary business talk like they could carpet their house with dollar bills. Another guy how much he rakes in delivering product from growers to shops.

    We are lucky here to have retail or med at all, I have to county myself lucky. However with towns banning sale (if you live in one) just compounds retailers, the retailers’ suppliers, the growers, “100% this and that, organic, prayed over” profiteering going on, everywhere in the us in ALL businesses, we get boned. Why do you think your other vegetables in the grocery store are also criminally priced one has to wonder? HMMM?

    Let Maryjane be our guide to love and happiness; we have made great progress but the work is not done. I don’t think greed has any room within there so one more step towards leaving the greed out! :)

 Leave a Reply