Much like Colorado and Washington, the introduction of a legal marijuana market in Oregon has been generating millions in tax revenues and created thousands of jobs. Though revenues from marijuana sales continue to grow, one thing has not: the price. In fact, in places where you can buy weed legally, prices seem to have gone down, sometimes significantly. Those of us buying an ounce of weed in Portland have seen this price trend in action. And while marijuana can be bought in various shapes, forms, and quantities, an ounce (28 grams) is the maximum amount of flower recreational consumers can purchase or possess in Oregon.
Supply and Demand
Nearly two years have passed since recreational marijuana went on sale in Oregon. The vast user population worldwide and in Oregon created a vacuum of interest in the industry, allowing for more and more growers and producers of marijuana to enter. This has flooded the market with fresh cannabis, and dispensaries have thrown consumers a life raft.
Through competitive pressures, with each dispensary vying for the same market, remarkable price shifts have occurred. Illuminating how reflexive the legal marijuana market truly is and how consumer behavior and sentiment change over time, revenues from sales have continued to grow, month over month.
Of course, this phenomenon of declining price and increasing revenues is microeconomics at work. It can be observed in many of the places where marijuana has been made recreationally legal. As a point of comparison, price data for an ounce of weed was collected from Denver and Seattle recreational marijuana markets. It should be noted that taxes on marijuana sales are collected differently in Colorado, Oregon, and Washington. In Colorado, taxes are collected on top of the purchase price, whereas both Oregon and Washington include the tax when advertising the purchase price. For reasons of consistency, any price listed on this post will include the 15% sales tax on recreational marijuana and any local taxes (Denver has a 3.65% city sales tax).
In each city, I reviewed the menu pricing from up to ten individual dispensaries across the metro area, measuring the average price, the most common price, and the maximums and minimums in each market.
The Price of an Ounce of Weed in Denver
Buying an ounce of weed in Portland, on average, is more expensive than in Colorado, but only narrowly. In Denver, an ounce of weed with no discounts (tax included) averages $216, with the lowest price being $83 and the highest $445. However, the most common price of an ounce of weed is $178.
Recreational consumers can buy and possess as much as an ounce of marijuana under Colorado law.
The Price of an Ounce of Weed in Seattle
Seattle’s marijuana prices beat both Colorado and Oregon on average, with as much as an 18% decrease between the Oregon and Washington markets. The average price of an ounce of weed in Seattle is estimated to be $195, with a minimum price of $50 and maximum of $390. It should be noted that the $50 ounce is shake. The most common price of an ounce of weed is $185.
Adults 21 and up may purchase and possess up to an ounce of marijuana in Washington. Although Washington and Oregon border one another, transporting marijuana or marijuana-infused products across state lines can still carry hefty legal penalties.
The Price of an Ounce of Weed in Portland
Portland is smaller than both Denver and Seattle in population, which may have some impact when it comes to price comparisons. On average, an ounce of weed in Portland is estimated to cost $236, with the lowest price being $88 and the maximum being $672. Both the median and the mode are $220 per ounce, suggesting $220 may be a more stable figure for estimating market prices in Portland.
Although Nevada has started their recreational marijuana program, Colorado, Washington, and Oregon have had at least twelve months to let the recreational marijuana program normalize into the local culture. No matter how much marijuana was a part of it previously, bringing the plant to a legal status has the ability to fundamentally shift perceptions and consumption habits at the local and state level. The effects of such changes can only be observed after the fact. This is also the case with pricing changes, as growers and suppliers meet fierce competition in their rush to woo the built-in demand for cannabis.
Whereas Colorado, Washington, and Oregon may have had recreational marijuana sales increased by tourism, excited by the exclusivity of legal marijuana, California coming online with recreational sales in 2018 may, in fact, change tourism habits and effect marijuana sales in other legal states. It will be interesting to see if the size of California, including the 268 million visitors the state receives each year, further energizes competition in the marijuana industry, pushing prices lower for consumers across the state and, potentially, exerting an effect on prices in Nevada, Oregon, or Washington. But for now, it can be reasoned that an ounce of weed in recreational markets costs roughly $200.
Article by: Joey Wells