Too Many Variables to Calculate 2018 California Marijuana Prices

The October wildfires in California impacted many legal marijuana cultivators and may have ruined some people’s hopes of making their living growing cannabis. However, while the wildfires drew a lot of attention, they are not the cause of the confusion surrounding attempts to calculate the 2018 California marijuana prices.

There are two significant variables that are making it challenging to get a real idea of how much consumers will be paying for recreational marijuana next year. The first is that California produces a lot more marijuana than consumers use, which should drive prices down. The second set of variables are costs such as taxes and lab testing which would drive cannabis prices up.

In 2016, the state’s marijuana farmers produced as much as 13.5 million pounds of cannabis, according to a study commissioned by the state Department of Food and Agriculture. That’s five times more than California cannabis users consumed. The surplus exited the state to be sold on the black market at a higher price—or worse, stayed put.

This year, industry observers are seeing more of the same—literally. Last year’s harvest is still coming into dispensaries for sale, and it’s now competing for shelf space with the 2017 crop—including the bounty from massive, investor-backed greenhouses.

“From what I saw before the fire, there was an awful lot of cannabis in the market,” said Andrew DeAngelo, the co-founder and director of operations at Oakland-based Harborside, the state’s largest dispensary. “Last year’s crop was still coming into our shop and being offered to us before the fire—and last year’s crop is still coming into our shop and being offered to us, post-fire.”

For most sun-grown marijuana farmers new or old, prices are at an all-time low.

How low? While retail prices have remained relatively stable (so far), suppliers are reporting wholesale offers of $500 to $700 per pound for outdoor-grown flower—if the crops are accepted at all.

For cannabis destined to be extracted into concentrates to fill vape cartridges or dab rigs, prices are even lower. $50 a pound isn’t unheard of.

That doesn’t include the cost of subjecting products to purity tests, which are shaping up to be the toughest in the nation and could be so costly that, at current estimates and prices, testing a pound of cannabis could be more expensive than buying one.

According to an estimate from the state’s official Bureau of Cannabis Control, lab testing will cost $407 per pound.

Along with the unknown amount of tourism anticipated for the beginning of legal recreational marijuana sales in California, exactly how much cannabis supply will flood the market make this very much a supply and demand issue. Do you think that legal marijuana prices should end up being much cheaper that illegal marijuana for California\’s 2018 marijuana market?

read more at leafly.com

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Richard Lowe

Richard Lowe is a 14-year veteran of the financial sector with licenses as a commodity broker (Series 3) and investment advisor representative (IAR Series 65). Along with a focus on raising capital for the firms he was employed with, he also wrote and edited much of the content published by them. He holds a BA in Journalism from the University of Massachusetts. He has been a longtime advocate for marijuana legalization due to the social injustices associated with marijuana prohibition and the strong potential for the medicinal benefits of cannabis.

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