Posted on 01/06/2016 8:12:33 PM PST by steve86
UNION GAP, WA.- The price of marijuana continues to drop in retail shops across the state, so we checked in with two of the local shops in Union Gap to see how they're adapting to the changing times.
Even though prices have dropped to an all time low across the state over the past year, local owners say their products are still flying off the shelves.
When Station 420, opened their doors in 2014 they were selling a gram for around $40.00.
"It was tough, the supply was short, we didn't have very many options and it was expensive," owner Adam Markus explained.
Likewise owner of the The Slow Burn, Ken Weaver, says they've seen popular items like oils, waxes, and edibles, known as "concentrates" drop as well, "They've gone from a $150.00 a gram when we opened, now to $40.00 a gram, so it's just crazy how far those have dropped."
Local retailers say the prices dropping is thanks to an increase in demand. For the first time since 2013 Washington state accepted applications for marijuana retail shops. That in turn has caused significant growth in the market.
"When concentrates were $150.00 a gram you know we made the same margin of that as when we are selling it at $40.00 a gram, but we're selling a thousand times more of it at the lower price," Weaver said.
Some shops did see a loss in profit when the the state changed their marijuana taxes from 25% to 37% last summer.
However with retail prices now similar or sometimes lower than those you'll find on the black market the profits are back up.
"Obviously if I can supply the same product for less money it's great for everybody," Markus said.
Even if the prices dip further these owners say they don't see it effecting them negatively, their goal is to stay one step ahead of the ones selling it on the street.
"I think long term we have to be an affordable alternative to the black market if we're not we don't have any future," Weaver told us.
The Slow Burn says on average they're able to take in $1.5 million a year in profits and they don't see that slowing down anytime soon.
Likewise Station 420 has seen such a rise in sales that they'll be expanding their store in the coming months.
Small town tv station — effecting instead of affecting and probably other errors. But I’m sure the basic story is correct.
Losing money on every sale but they’ll make it up on volume.
There’s a story it’s having an effect on the farmers in Mexico.
Good!
And that average is based on how many past years of sales history?
That sounds a lot more like revenue. The state published a table of revenue at the stores a while back. Some had only a few ten thousand of revenue for the previous 12 months (not calendar year since legal recreational retail started in July, 2014, I think.
I don’t think Mexican pot farmers are getting $40/gram from the cartels.
I still find it hard to believe that dealers don’t heavily undercut the legal price.
$1100 an ounce for pot? Who can afford that? Has marijuana grown so powerful that $40 worth can keep you high for weeks on end?
I imagine an ounce (the legal limit) sells for around $200 at the stores now. But I believe most of their sales are just a few grams.
I think the article said that the initial price for marijuana was $40/gm, but that it has dropped to $10/gm (~$300/oz), since supply has caught up.
“Concentrates” have dropped from $150/gm to $40/gm.
Hopefully, store prices (including tax) will drop enough to dry up the black market, depriving cartels of revenue.
I noticed that Mexico had a court ruling in 2015, that opens the door to legalization there - a potentially huge supply. In addition to Mexican and US federal laws banning marijuana though, I believe that there are also international treaties that prevent importing marijuana - even if a state should legalize it.
Industrious growers (in state) should be able to ramp up production to meet demand at much lower prices though - few other crops sell at such high price. I’d guess that prices will continue downward over time, and taxes will continue upward.
“I imagine an ounce (the legal limit) sells for around $200 at the stores now. “
I read elsewhere that prices were running between $200-$400 per ounce, depending on quality and local supply/demand.
As a few seasons go by, I’d expect more growers to get on the bandwagon, and existing growers to reinvest some profits in expanding. So I think that that prices will continue down toward some more natural equilibrium. After that, it will be mostly driven by tax policy and government regulation.
NOPE...lol...the underground pot growers still control the market price...They don't respond well to competition and don't participate in tax policy and regulation...It would kill em with taxes
Do your own local DD...
So are you saying that underground growers will continue to sell at a lower price than the stores?
I am saying that at some point, prices will reach the bottom of this big decline they are on, and settle out.
Legal growers will start producing enough, and efficiently enough, that the price difference with underground (black market) suppliers will be basically the taxes and regulatory costs (Licenses, packaging, testing/inspections and such).
Big legal growers, like other modern farmers, will likely become more efficient than small operations are capable of.
Underground growers would have to consider the costs of getting caught (and having everything seized) as well as the tax savings. It might be easier to go legit - there is still good money in it.
Personal use growers (just a few plants) will probably always beat the store bought or underground prices.
More ‘grows’ are being done indoors, reducing the effect of seasons on supply. Washington isn’t exactly known as the ‘sunshine’ state.
And yes, a gram can last a long time. Recreational cannabis is predominantly composed of two strains, indica and sativa. It is easy to find product that is customized for effect, duration, and intensity between mental and physical reactions.
What I’m hoping to see soon is a revitalization of the hemp industry, with Washington leading the way. It already has the shuttered paper mills that can be converted to accept hemp fiber. It has acres of land needing ground cover as a result of recent forest fires. And it shares with Oregon and Colorado botanical expertise that could be shared with a largely unemployed population who could be utilized in the textile industry offering hemp clothing.
Actually, eastern Washington -- especially south central parts -- are about as sunny as nearly anywhere in the U.S. for nine months of the year. The whole east side of the state is in the rain shadow of the Cascade Range. There are several commercial outdoor growers here adjacent to the Horse Heaven Hills.
37% tax.
Toke one up for the children.
Thread on pot testing by commercial labs
http://www.freerepublic.com/focus/news/3380662/posts?page=1
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