Vegas recreational cannabis could be super cheap!

Something pretty cool happened Washington went recreational and the same can happen for Vegas recreational cannabis.

Check this out:

source: The Washington Post

Those falling lines represent the price of cannabis in the two years following the rollout of recreational sales in Washington.

What was once selling for about $22 a gram dropped to below $10 a gram. Even better (or worse, depending which side of the counter you’re on), prices are continuing to drop at about 2% monthly. If the trend continues, prices could fall 25% annually going forward.

What’s causing this price drop?

A lot of cannabis financial analysts are scratching their head over this question, but drug policy specialists know exactly what’s fueling the price crash: the end of prohibition.

Black market dealers have a lot of impositions placed on the way they operate and sell. They must stay covert, pay increased wages based on risk, they can’t advertise, and can’t seek legal help from courts to settle disputes. All of this keeps black market cannabis prices fairly high here in Vegas.

Falling prices are good for users and others, including law enforcement, who’ll spend less time and money pursuing cannabis crime. Incarceration rates also will drop, further saving money.

   image source

The one downside is that the state will see lower returns on cannabis taxes. Perhaps one of the reasons taxes are being raised on patients. Hmm? Maybe?

Falling prices are bad for those who saw nothing but $$$ in recreational cannabis. While there’s still a ton of money to be made, growers and dispensers are starting to realize Vegas recreational cannabis isn’t the gold mine everyone thought it was going to be.

Some anti-cannabis groups are speculating on increased use based on such low prices (they prefer the term ‘abuse’ over ‘use’). While this may be the case, it’s hard to determine user outcomes so far in advance. What’s important is public and consumer education during recreational rollout and going forward.

How can it possibly get any cheaper?

Dispensaries are fighting hard for your business. If you follow the specials around town, you can find ounces for about $100. While not usually a top-shelf product, that’s a pretty great price.

image source

Something I’ve heard from many first-time dispensary patients: Everything in this store is better than what I’ve been getting from my dealer. Why would a user like that ever choose a top-shelf product when the cheap ounce is better than what they’re used to?

Some analysts think that top-shelf cannabis and specialty products will be where dispensaries make their real money. Even predicting that bottom-shelf flowers will become promotional items given out for free, what’s called a loss leader, which is a product sold or given away at a loss in hopes of attracting more customers. Kind of like the bowls of nuts or pretzels that bars put out for their drinking guests.

Prices will go up before they go down!

If you look at the initial period following recreational rollout on the above chart, you’ll see a slight uptick in prices. This is attributed to the local market adjusting itself and on cannabis shortages. Read all about Vegas’ recreational cannabis shortage here.

Prices rose as Washington dispensaries ran out of product, then began their nosedive as more product began rolling in and hitting shelves. We can expect the same thing to happen here in Nevada, so be prepared to see prices go up over the summer as dispensaries run low on stock.

Conclusion

Vegas recreational cannabis is going to get pretty inexpensive, but not right away. Dispensary specials will become the battleground that these price wars are waged on, so follow your favorite dispensaries to get their best deals.

Falling cannabis prices are good for consumers and law enforcement, but not so good for cultivators and dispensaries. Expect to see prices rise over the summer as product stock dwindles, but fall again as cultivators bring in new and bigger crops.

When all is said and done, I believe we’ll see a clear distinction between top and bottom-shelf products. You’ll find the $100 ounce and the $100 quarter, with a fairly limited selection in between. The choice will be yours.