How legalization caused the price of marijuana to collapse

[DonViejo]

By Keith Humphreys September 5 at 8:42 AM

All the diverse effects of legalizing recreational marijuana may not be clear for a number of years, but one consequence has become evident almost immediately: Pot has never been so cheap.

Steven Davenport of the Pardee Rand Graduate School has analyzed marijuana retail prices in Washington state since legal recreational markets opened in July 2014. Remarkably, prices have fallen every single quarter since.



When Davenport spoke to me 18 months ago (Wonkblog coverage here), retail marijuana prices had already fallen a stunning 58.5 percent. Yet he predicted correctly that the price collapse was not complete. The current retail price of $7.38 per gram (including tax) represents a 67 percent decrease in just three years of the legalization, with more decline likely in the future.

Davenport expects the marijuana industry to continue to find ways to lower prices for the simple reason that it’s a profitable business model. “Some consumers will prefer higher priced brands, but there will always be a market for the brand that can produce adequate quality cannabis at the cheapest cost,” he notes.

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https://www.washingtonpost.com/news/wonk/wp/2017/09/05/how-legalization-caused-the-price-of-marijuana-to-collapse/?utm_term=.c16a7ed36f6e&wpisrc=nl_az_most&wpmk=1

[Phoenix61]

1. I've always thought that people who profit off illegal pot

are contributing massive amounts of money to ensure it stays illegal. Throw in the cotton industry because it's the marijuana laws that prevent hemp from being grown and that's a pretty big pile of money.

[exboyfil]

2. I would like to see consumption curves

for pot, alcohol, and other drugs broken out by age.

This is a fascinating social and economic experiment.