By Debra Borchardt | Forbes.com | January 31, 2017
The falling price of legal marijuana is shaking up the dynamics of the marketplace.
“Wholesale marijuana prices declined in 2016 from $2,500 to $1,000 per pound, with some dispensaries offering recreational ounces as low as $65 on CannaSaver.com,” said Brian Shapiro, Chief Executive Officer of CannaSaver. Shapiro said that grow houses flooded the market with cheap marijuana and subsequently drove prices down. Only concentrated cannabis products like oils remained fairly unchanged in pricing.
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(Wholesale marijuana prices fell from $2,500 to $1,000 per pound in 2016. Chart provided by BDS Analytics.)
Douglas Brown of Contact High Communications said that it wasn’t existing cultivators that tipped the market, but rather new and large entrants to the growing side. “At some point — and we are probably there now — flower becomes a commodity, like soybeans or corn. And then only the biggest players make any money selling it. Margins are thin, but they grow a lot of flower,” he said. Brown pointed to what he called “enormous” grows in Pueblo, CO.