Washington’s recreational cannabis prices have seen dramatic drops since state-licensed retailers first opened shop in 2014: from an average of $25-$30 grams at the market’s launch, prices have plummeted recently to an average of $10.34 per gram across the state — more than a 50% decrease in price.
The price drop is largely attributed to a surge of new retailers as well as some significant changes made to the taxation of wholesale cannabis last summer. Particularly, Washington legislators did away with the original taxation system — which included a three-tiered taxation system that taxed producers, processors, and retailers at 25% on each transaction — in favor of a single 37% excise tax that applies to all consumer sales.
According to The Daily News, some retailers voluntarily took a hit on their profit margins following the tax changes in order to keep prices down and appease consumers. “Sometimes it feels like a race to the bottom,” explained Andrew Dhalai, owner of 420 Holiday in Longview, Washington.
Emergency rules are expected to be issued this week by the state’s Liquor Control Board, the regulatory agency in charge of managing the Washington’s marijuana marketplace. The rules will clarify how a slew of new retailer licenses that are expected soon will help fold the state’s medical cannabis “gray market” into the highly-regulated recreational market.
Photo Credit: Insanity Strains