Is Legal Marijuana More Difficult to Sell?

One of the problems with legal marijuana is it is more expensive than marijuana sold on the black market. Retailers in Colorado and Washington have complained that high taxes on legal marijuana still make black market marijuana appealing to many buyers.

Even though Washington’s marijuana market opened last summer, many stores closed because there wasn’t enough pot to sell and pot itself was more expensive than ever. Now that a new harvest of marijuana is making the legal crops more accessible to retailers, there have been additional problems with the legal pot industry.

In an unexpected twist, growers are having a hard time selling their crops. Many who entered the industry are now considering backing out because of the low rate of sales on the legal market. According to reports, licensed growers had harvested 31,000 pounds of marijuana, but the pot shops have only been able to sell less than 20 percent of those crops. State users have stuck with buying on the black market or purchasing as medical users to avoid the significant taxes associated with recreational use marijuana. This means that the product is moving at a glacial pace off the shelves–if at all.

Most growers in Washington have reported a surplus inventory, and no one has reported growing rich off the retail business. While state records show that there are 270 licensed growers in Washington, there are only 85 stores able to legally sell recreational pot. One of the problems is the licensing process has a number of bureaucratic hurdles. There are also many cities and counties that have locally banned the pot business. While advocates are hoping for the stores to continue to open around the state to provide additional selling points, Washington State is projected to have a dearth of marijuana every year after the big fall crop sells out.

Marijuana is still expensive throughout the state and can cost up to $25 per gram. As habitual users know, this is twice as much as pot costs on the black market and twice as much as it generally costs in a medical dispensary. Given the new industry and marketplace, the prices of marijuana are likely to continue to fluctuate over the next year.

One of the reasons Colorado has been able to better stabilize the market is regulators have tightly limited production. Growers also have to prove a legal demand for the product and other regulations prevent excess marijuana from being sold in other states. This balances the demand and supply throughout the state. Washington growers may have unrealistic hopes for how quickly they can recover initial investments and low prices are already making it difficult to pay the bills.

As the marijuana business and legal landscape changes throughout the West Coast and in California, users and dispensary owners should stay abreast of their rights and obligations. Our Orange County medical marijuana attorneys are dedicated to protecting our clients to ensure compliance and to achieve optimal results in any criminal matter.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

More Blog Entries:
Beverly Hills Cannabis Club: The New Face of Marijuana, January 13, 2015, Los Angeles Marijuana Lawyer Blog
United States Marijuana Laws Influencing Other Countries, February 14, 2014, Los Angeles Marijuana Lawyer Blog