Recreational users of marijuana are seeing price cuts on the street thanks to the growing number of states that have approved the drug for medicinal use.
The price of cannabis, of course, varies wildly—depending on the strain purchased, its potency and the parts of the plant. Top quality pot in New York, for example, costs nearly $442 per ounce, while low quality is just $161, according to one website that tracks costs, PriceofWeed.com.
On the whole, though, prices have been dropping nationwide over the past three to four years.
“High Times” magazine, in its October issue, declared “It’s a buyer’s market!”, noting that the average price per ounce nationwide had fallen $49 in the past month alone.
Oregon boasts the country’s cheapest pot, with the price of a high quality ounce running $259.13, according to PriceofWeed.com, a site that uses crowd-sourcing methodology to track marijuana prices around the country. (Anonymous users who buy the drug on the street input what they paid—and for how much—and the site averages out prices for the state or territory.) Montana comes in second at $273.87 per ounce. Both states are among the 14 to have passed laws allowing the medicinal use of the drug.
Georgia and Virginia are the states with the most expensive cannabis, both coming in at roughly $452 per ounce. Neither has legalized the drug in any form.
Geographically, pot tends to be more expensive along the east coast—with the exceptions of Florida and Maine. Users there generally pay $425 or more for high quality product Mid-west tokers pay a bit less.. And Western marijuana users – from Colorado onward –pay the least (typically less than $400 per ounce).
PriceofWeed.com is one of four sources insiders look to as they track the street price of pot. Allen St. Pierre, executive director ofNorml(the National Organization for the Reform of Marijuana Laws) cites it as one his organization regularly monitors.
The others are the official DEA pricing index (which St. Pierre says is the least accurate), "High Times" magazine's monthly Trans-High Market Quotations, and Weedmaps.com, which has employees call medical dispensaries weekly for price, potency, strain name and more and then determining pricing trends from that information.
But even with the cost declines of the past few years, prices remain steep, which surprises some people.
“The vexation for the customer has been that for years, the individuals who would pay [high costs for recreational pot] did so because suppliers had all these legal threats,” says St. Pierre. “As that has been removed, there has not been a commensurate reduction in prices.”
That doesn’t mean it won’t happen, though.
In California, the price of high-grade cannabis is down roughly 17 percent over the past 12 months—a trend that is likely to accelerate, due in part to changes in the business practices of marijuana farmers.
“Ten to twenty yeas ago, the people who were, for lack of a better term, the migrant marijuana workers were paid in cash,” says St. Pierre. “Two or three years ago, they started getting paid in product … which they have trouble converting to cash, so they logically begin selling it illegally. People are walking to the dispensary with the mindset that they’re going to pay X dollars, then these workers will undercut that by 50 percent. That phenomenon is the equivalent of having a wholesaler stop people before they walk into a Wal-Mart.”
The rise of city-sanctioned grow farms, like those being planned in Oakland, could also put pressure on street prices of pot, since it would substantially boost supply.
And if more states pass medical marijuana laws and wider legalization efforts prove successful down the road, that should continue to impact prices.
A recent California ballot initiative to legalize the sale and consumption of marijuana (as well as tax it) was defeated, partly because producers feared it would result in drastically lower prices.
St. Pierre says Norml expects the price could eventually fall to something comparable to a pack of cigarettes.
Watch the premiere of "Marijuana USA" tonight at 9pm, 10pm, 12am and 1am ET on CNBC.