The law of supply and demand doesn’t always make sense. It’s been a little over a year since Colorado began to allow stores to sell marijuana for recreational use, and somehow (according to a study by NY-based brokerage company Convergex), sales are up, and prices are down. Here’s what the study had to say:
Since last June, the average price of an 1/8th ounce of recreational cannabis has dropped from $50-$70 to $30-$45 currently; an ounce now sells for between $250 and $300 on average compared to $300-$400 last year. More competition and expansion of grow facilities contributed to this price decline, but it is also a natural result for any maturing industry as dispensaries try to find the market’s equilibrium price.
According to the study, sales have increased by 98 percent year-over-year in April. Which means stores are expected to gross $489 million in 2015, which is a 50 percent increase from 2014. The research also compares the rise of the marijuana industry to Silicon Valley. CannaCamp Mountain Resort is mentioned in the study as a place where guests can “hike, zip line, and roast marshmallows, all the while smoking cannabis.” In other words, there’s a marijuana resort industry out there — and it’s posh as fuck!
It’s also interesting to note the study reveals the size of individual purchases are getting smaller. Here’s more from the study:
Our contacts still report between 100 to 300 customers entering their stores each day, but they only spend about $50 per visit compared to $100 last June. About half of these customers are tourists in most stores we interviewed. … The 10% sales tax on recreational cannabis will be repealed only on that day (September 16) due to a provision included in a bill Colorado Governor John Hickenlooper signed into law earlier this month. The bill also permanently cuts the 10% sales tax on recreational marijuana to 8% in 2017 in an effort to squeeze out the black market.
Photo via Flickr user van_mij