By virtue of it being legal the prices are lower than street prices.
They probably used the street prices for their tax expectations.
That would be my guess as well. It isn't as if anyone did any serious market research on it.
This is, actually, a classic example of taxation being used for dual, conflicting purposes: you can either generate revenue with it or you can use it to diminish the taxed activity, but not both. They work against one another. If the state wants to maximize revenue they should be putting up pro-marijuana billboards - "Hey, kids, it's got Vitamin M!" If not, expect taxation to depress sales. This isn't rocket science, and they do have very well-developed competition.