More on the Washington State Cannabis Price Collapse

I feel sorry for the farmers getting caught in the downdraft. More than that, I’m worried about the impact of cheap pot on problem use, and on illegal exports out of state.

But as a pure analyst, I’d just like to ask Beau Kilmer to take a bow. He calculated the cost of Dutch legal medical cannabis at approximately 1 Euro ($1.30) per gram. Now the reported wholesale price in Washington is $700-$800/lb. That works out to about $1.65 a gram.

Will wholesale prices rise as more retail stores are licensed? Maybe, for a while. But there’s every reason to think that next year’s crop will be bigger, and therefore cheaper, than this year’s. In the long run, the pre-tax price of a joint will be the pre-tax price of a cigarette or a teabag: pennies, not dollars.  That’s the policy problem we need to wrestle with now. It seems inevitable that cannabis will become legal. But will it do so in a more-public-health-friendly way, or a less-public-health-friendly way? Right now, the auspices aren’t favorable.

[Cross-posted at The Reality-Based Community]

Mark Kleiman

Mark Kleiman is a professor of public policy at the New York University Marron Institute.