Could low-priced cannabis be coming to the East Coast in the near future?
It is likely that as cannabis becomes more of a commodity, prices will continue to drop, similar to other agricultural commodities.
How Much Does an Ounce of Weed Cost?
According to Amanda Reiman, of New Frontier Data, a store in Ukiah, California, was selling an ounce of marijuana for $60. Reiman, a longtime industry insider, said it was worth noting that the deal was for a strain that was harvested over a year ago. It was also likely a clearance price.
However, the same store also advertised online ounces of other cannabis strains for as low as $78 per ounce.
Reiman expects economic forces push brands into lowering their prices over time to remain competitive or get whatever price possible.
However, in New Jersey, you’re looking $250-$550+ in retail legacy and/or legal markets for an ounce of cannabis.
Once interstate commerce becomes a reality, pricing will change even more.
As cannabis becomes more of a usable commodity, prices will continue to drop, similar to the agriculture industry. While low prices may be emerging in California, it’s not clear if the trend will occur in New Jersey or the tri-statea.
Factors such as local laws and regulations, competition, and consumer demand all play a role in determining the prices of cannabis in our local regions.
However, as the legalization of cannabis continues to spread and the market becomes more competitive, it is possible that prices may decrease on the East Coast as well. It will be interesting to see how the cannabis market develops in the coming years and how it may differ from state to state.
Cannabis Consumption Areas are coming, and we want to hear from you! The comment period is open until Saturday, March 18, 2023. Visit https://t.co/IrGgxnVlJt to see all the proposed rules and to leave your comment. #NJCRC #NJCannabis #NewJersey pic.twitter.com/VizhVEwkXm
— New Jersey Cannabis Regulatory Commission (@NewJerseyCRC) January 23, 2023
Low cannabis prices are not a good sign for the industry or for the end user.
Low prices often may lead to low-quality products as some cultivators and processors may cut corners to make up lost revenue. This could be bad for the reputation of cannabis products as well as for consumers’ health.
Additionally, low prices likely mean that farmers and retailers are not making a fair profit, which could lead to a lack of investment in the industry and limit its growth.
Furthermore, with weed still being illegal at the federal level, interstate commerce is currently not allowed, and states are not able to trade cannabis products across state lines. Prices could drop even further if federal legalization happens and makes for a more open and cross-boundary market.
When Will Prices Drop On East Coast Cannabis?
Overall, it is difficult to predict how the cannabis market will evolve on the East Coast. But it is clear that prices in California are dropping. This trend could be a sign of things to come.
As the market becomes more competitive, prices will likely continue to drop. It’s important to ensure it doesn’t come at the expense of quality and reasonable profits for farmers and retailers.
While prices in California are dropping, it is uncertain if the same trend will occur on the East Coast. Factors such as local laws and regulations, competition, and consumer demand play a role in determining the prices of cannabis.
However, as the cannabis market becomes more competitive, prices may decrease for East Coast cannabis as well.
It’s important to keep in mind that
Low prices may seem good for a consumer’s bottom line. But it might not be good for the industry or the consumers. Often, cheaper prices come at the expense of cannabis quality and fair profits for farmers and sellers.
The nature of fair profits can be debated greatly.
The Coexistence of Legacy and Legal Cannabis and Its Impact On Market Prices
The existence of a cannabis black or gray market can make it difficult for legal cannabis businesses to compete. They are subject to stricter regulations and taxes.
Consumers may also be more likely to buy cannabis from illegal sources. Their weed is cheaper, more accessible, familiar, and routine.
A black market or gray market for cannabis can coexist with a legal cannabis market. But it very likely also undermines and undercuts it.
New Jersey has provided a clear path for anyone interested in obtaining a license. Regardless of prior convictions or involvement in cannabis prior to legalization, there is a path for most. There are many licensees with recent or current cannabis charges.
At the recent Working In South Jersey Cannabis Event, CRC Commissioner Krista Nash said if a license applicant receives a Cure letter, they not are out of the running. They just need to provide more information.
“If your business plan states you need X amount of dollars to become operational. You have to show where you’re going to get that. If you have an angel investor providing a financing, financing agreement, or commitment letter. Or if you have the money, just show it,” she explained.
“We’re not just rubber stamping everything,” she declared. But Nash made it clear they were here to help businesses come to market.
Legacy Becomes Legal
The ultimate success of the legal market will take great efforts from the MSOs on quality, respecting the OG’s, and welcoming and supporting legacy operators into the legal cannabis market.
The legal market must provide reasonable pricing to consumers, especially medical patients. The legal market needs to include legacy operators who built the industry while the legal cannabis industry is being built.
While many in the legacy market care greatly about quality, many don’t. The unlicensed market is unregulated. It does not have the same reliable and consistent quality standards as the licensed market across the spectrum.
While this is not always the case, consumers could risk buying contaminated products or inaccurate labeling when purchasing from unknown sources.
This could damage the reputation of future cannabis products and perceptions from the public. The more problems with any cannabis business, the harder it is for legal businesses to establish trust with their customers.
Ideally, those not currently licensed are currently seeking licensure under the NJ state guidelines to bring their amazing craft and heirloom practices and products forward. This brings us to the focal point of a NJ Craft Cannabis market.
Craft Cannabis in New Jersey’s Legal Market
In a legal market, craft cannabis plays a critical role by providing consumers with a diverse range of products and unique experiences with a particular focus on quality. Craft weed growers typically have a passion for the plant and focus on producing high-quality, small-batch cannabis products. They often experiment with different strains and growing techniques to create unique and exclusive marijuana products.
Craft weed could benefit from the legal market by being able to access a wider range of customers. Craft producers also gain access to more resources, such as legal funding, marketing, and distribution channels. Furthermore, being able to operate in a legal market would allow craft weed growers to focus on quality, safety, and sustainability, likely providing an ever better product (if that’s imaginable).
Craft vs. Corporate Cannabis
However, in order for craft cannabis to thrive in a legal market, there needs to be a balance between the big corporate companies and the small craft growers. Balance is achieved by making sure the laws and rules put in place do not favor only the big MSO companies but will also support the small craft growers too.
Additionally, users need to be educated about the value of craft cannabis and the difference between small-batch craft cannabis and mass-produced cannabis products to encourage them to support craft cannabis growers.
In short, a legal market for weed in NJ could provide an opportunity for craft cannabis growers to thrive and provide users with a diverse range of high-quality products.
