Price of Cannabis Drops By 50% In Colorado After Legalization
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The price for a pound of cannabis has fallen by 50 percent in a year in Colorado, from around $2,400 to $2,600 per pound in October of 2015 to around $1,400 to $1,600 per pound now.
The figures come courtesy of some of the first-ever price tracking of the pot market, which is no longer obscured by prohibition. Tradiv — a wholesale online marketplace for cannabis — released the statistics Monday.
As legalization spreads and risk drops, so does the risk premium for pot. Drug policy research experts at RAND have estimated that up to 90 percent of the price of black market pot is this risk premium. That means a gram of marijuana, which once cost as much as $20, could fall to $2 under full national legalization.
Prices have rapidly declined in Colorado, Washington, and Oregon, according to price listing sites like WeedMaps.com.
While Californians are still paying up to $20 per gram of pot, consumers in legalization states are paying half that or less. Many illegal cannabis farmers are concerned further legalization will bring more savings to consumers, and about half are opposed to drug policy reforms.
Overproduction of cannabis and thinning margins have already crashed the price of pot once in Washington. It’s leading to continued industry consolidation in Colorado, as more efficient producers squeeze out costlier grows.