It’s 2017, and cannabis is finally legal in certain states. In other states, you can legally acquire cannabis or cannabis-derived products with a special prescription if you have certain conditions. While the rest of the states have yet to follow suit, the legal cannabis business is just that — a business, and one you can invest in.
Yet as more businesses and businesspeople enter the cannabis market in states like Colorado, Oregon, and Washington, the price of cannabis continues to decrease. After all, when the market is supply is higher, the product itself will become cheaper.
This major price decrease is causing growers, dispensaries, and other cannabis-related ventures to adapt to a changing market. But how are they altering their businesses to keep up with the times, and how is this affecting consumers? Let’s take a look.
For consumers, cheaper weed means spending less and buying more.
According to Bloomberg, a pound of cannabis in Colorado costs $1,300, while a gram costs consumers $6.61. This is down 48% and 25%, respectively. This means a lower entry point for consumers, allowing them to buy more and more often, while enticing new customers with less money to spend.
For independent growing operations, cheaper weed means changing how their business operates.
Cannabis growhouses are implementing new technology allowing them to grow more weed for cheaper. Some growhouses are automating how their plants grow by adding automated watering and feeding systems once used for non-cannabis-related crops. Many of these cannabis growing operations formerly existed on the illicit market, and used their decades of expertise to adapt to the booming legal market.
Dispensaries are offering more options in addition to regular weed.
Since a basic gram of weed costs less, dispensaries are focusing more on selling premium, cannabis-derived products. This includes everything from designer edibles to infused lip balm, allowing people to use cannabis in a variety of ways. Dispensaries can potentially make more on these products, and are incentivized to push them over regular ol’ cannabis.
It will be interesting to see how the Trump administration affects the legal weed industry in the coming months, as several cabinet members are vocal opponents to cannabis. Also, more big-name companies are entering the industry; Scotts Miracle-Gro, for instance, purchased a number of hydroponic companies who benefit from growing operations. This could mean slightly increased expenses for growhouses if prices for machines, fertilizer, and the like go up.
One this is certain: weed is cheap, businesses are making and selling more of it, and business is good.