Washington State, which is experimenting with marijuana legalization, has seen weed prices drop through the floor.
According to marijuana price data from Washington’s Liquor and Cannabis Board, aggregated by Steve Davenport of the Pardee RAND Graduate School and Jonathan Caulkins, a professor at Carnegie Mellon University, there was an initial rise in marijuana prices after legalization.
Davenport argues shortages of marijuana sparked the first few months of price rises. But almost two years after retail sales began, the marijuana landscape has changed entirely and prices “are now steadily falling at about two percent per month,” says Davenport.
“If that trend holds, prices may fall 25 percent each year going forward.” Economists and experts in the field have long predicted price falls after marijuana legalization, because black market sellers of marijuana have huge costs, which are then factored into the price of the drug.
Marijuana cost as much as $25 per gram from lawful retailers in the months following legalization. Prices have now fallen as low as $10 per gram. The wholesale price of marijuana was $2.99 per gram, reports the Washington Post.
Illegal suppliers have to bear the costs of law enforcement constantly seizing stock or jailing employees. In a legal market, marijuana businesses don’t have to worry about being busted by the cops and can benefit from economies of scale.
As prices in the legal market drop, the costs for law enforcement and the criminal justice system also diminish because people who would have fallen foul of the law buying illegal weed can find a better deal from a legitimate business.
Despite falling prices, a study presented at the Pediatric Academic Societies shows teens haven’t found it any easier getting their hands on marijuana.
Titled “Adolescents’ Ease of Access to Marijuana Before and After Legalization of Marijuana in Washington State,” the study examined results from the Washington State Healthy Youth Survey ranging from 2010 to 2014. (RELATED: Study: Washington Teens Find It Easier Getting Booze And Cigarettes Than Weed)
The proportion of teens who said it was “easy” to access marijuana in 2014 was practically the same as it had been in 2010 at 54 and 55 percent respectively. Teens were more likely to say that both alcohol, cigarettes, and other illicit drugs were “easy” to access.
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