The illegal cannabis market is _______ cheaper than the legal market? 10%, 55%, or 93% cheaper?
80 ounces are legal in Michigan and 4 grams in OregonWhat’s going on with the price pressure in the legal cannabis market across America?
Unless you’ve been living under a rock, you know that The illegal cannabis market is cheaper of the legal market, and one of the main reasons why the legal market is faltering so badly across America right now. Combine low prices from unlicensed sellers, strict regulations, and the 280E tax code, and it makes it nearly impossible to turn a profit in the legal cannabis game.
But how much cheaper is illegal weed than legal weed purchased from a dispensary? Wouldn’t people pay a premium for lab testing and “know your source, trace seeds for sale” stuff? Yes, to some extent, but what premium would you pay for a candy cart or vaping cart in order to feel more secure and confident in the product you’re taking home?
Will you pay a 10% premium on a Vape Cart or a bundle of pre-rolls? So for $20 on the bootleg market, would $22 at a reputable dispensary go for peace of mind? I think almost everyone would say, “Yeah, sure, why not, be safe.”
How about 20% more on the same vape cart or edible bag? $20 on the bootleg market and now $24 at the dispensary you “like, know, or trust.” Well, ok, but now it’s starting to mark and take away purchasing power from other products i might want to pick up like a pre-roll or lollipop.
How about 30%? Would a regular consumer of cannabis pay 30% more for a 100mg chocolate bar from a dispensary than a licensed non-state seller? So your $20 chocolate bar is now $26? (Taxes will be discussed later, so don’t get excited yelling at me, just yet.) On a $100 order, no taxes yet, you’re at $130, now you dump the taxes the legal guy has to charge you and the illegal guy doesn’t. It’s probably now closer to 45% higher than black market chocolate bars when taxes go depending on your condition and if it’s medicinal or recreational.
Cannabis.net I decided to do a secret sting if desired, to find out the true prices of illegal market weed in two distinct regions, maine and california. Each state has a huge illegal market thanks to a variety of reasons such as geography, taxes, population or lack thereof, and access to the other state’s borders.
If you want to skip to the punch line, state taxes included, an illegal market vape cartridge is 60 to 65% cheaper and food items like chocolate and gum can be 93 to 98% cheaper! I guess we call that “proof” the legal cannabis market said!
Most of the industry rolls their eyes when they say “black market cannabis is cheaper,” and thinks in their heads 10, 20, 30%, maybe. Throw in the onerous state taxes and 280E federal codes, and maybe in crazy liberal places like California, did it get to 40% more?
Not even, “close, bud,” says Bender in The Breakfast Club.
A quick stroll through Weedmaps listings will show you that in Maine, a milligram of THC in edible form can be had for $0.10. Yes, a cent for a milligram of THC. You’ll see many medical stores selling 250mg chocolate bars for $25 and 250mg gummy bags for $25, plus 6% tax. With specials, a la Weedmaps, or buying in bulk, you can probably get even less than that for say $0.08 per milligram of THC.
We chose Los Angeles for a California quick check and researched 3 legal dispensaries for deals and offers. Vape vapes for 1 gram, live resin, were $25 to $30, and a milligram of edible THC was $0.11 to $0.15. Please note that California has heavy taxes on weed, so this number will go up a lot when you sign out.
Now, comes the part where you thought you knew, but were afraid to ask.
From an unlicensed cannabis dealer in California:
THC Gummies 1000mg (10x100mg) $8 for a bulk pack $80 for a case of 10 packs, no tax. That would be $0.008 per mg of THC. You thought a dime ($0.10 was cheap, how about 8 pennies per mg of THC!)
1 gram of live resin or vape stashes for $12 in bulk, 10 for $120, 35 strains. Yes, I do bring in a bulk order to make my prices lower than individual retail prices, but I’m doing this to show you that a bulk order is $80-$100 on the bootleg market, not the $500 minimum, so while it’s not apples-to-apples , it could soon be with a $100 bill in your hand. $12 compared to $26 in Los Angeles which hasn’t added $7 in statutory taxes yet, is starting to sting, right? 55 to 60% cheaper in California on vape carts from legal to illegal stores.
Chocolate? Sugar should be cheap in California. A 200mg chocolate bar for $2 in packs of 10, or a 2500mg bar for $18, a pack of 10, but obviously no tax. It comes in at $0.01 per gram of THC and $0.007 per milligram of THC in edible form. Seventh of a penny, compared to a reasonable coin for a legal and competitively priced THC supplement. This is a price difference of 90 to 95% with taxes factored in. Would you pay 95% for THC candy or chocolate just to know it was lab tested?
To stick the knife in a bit more, these quoted prices were from the menu sheets, no haggling or haggling attempted yet. In gray markets, haggling and deal making is a wide open space, so you can get a price per milligram of THC lower with higher purchasing power and larger orders.
The point of the story? Yes, cannabis in the illegal markets is cheaper than legal cannabis, not by a little or by a lot, but by an enormous, huge amount. So huge, and I’m not sure how the legal industry can even come close to the competition, even with lab tests and such a friendly clientele.
When low-cost purveyors of hemp, such as Colombia and Brazil, come to market and start shipping legally grown and licensed cannabis at $0.06 per gram, what happens next to the illicit market in the United States. At this point, the bottom cuts become the bottom, and the cycle continues until we hit rock bottom price per gram, ounce, and pound of weed. that it $0.06 per gram at legal growth in ColombiaWhat do you think of the illegal market prices?
And you wonder why the black mark leaves such bruises on legal cannabis?
(The article first appeared in Linkedin here)
How do you beat the black market? Read on…
