MJBizMag August 2020 - 52

LICENSED BUSINESSES OPERATING IN BOTH THE LEGAL AND ILLICIT MARKETS
Chart 10: Average Retail Price Per Ounce of Adult-Use Cannabis: California Legal Market vs. Out-of-State Illicit Markets
How to Compete With the Illicit Market
Average Retail Price Per Ounce of Adult-Use Cannabis:
California Legal Market vs. Out-of-State Illicit Markets
$400
$300
Average Price Per Ounce Across All
Listed States Besides California:
$293
$244
$200
$105
$100
$0
California
Idaho Montana Nebraska Kansas Wyoming North
Dakota
South
Dakota
Note: Data current as of 2/11/2020. California pricing data refers to average pretax price of one ounce of cannabis purchased from a licensed retail
store. Figures for all other states describe the price per ounce for medium quality adult-use cannabis purchased on the illicit market.
Source: Headset, Price of Weed
Copyright 2020 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved.
Note: Data current as of Feb. 11, 2020. California pricing data refers to average pretax price for 1 ounce of cannabis purchased from a licensed retail store. Figures for all other states describe
the price per ounce for medium-quality, adult-use cannabis purchased on the illicit market.
Source: Headset, Price of Weed.
Copyright 2020 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved.
While taxes and licensing fees drive up the cost of producing legal cannabis, regulated California marijuana retailers offer impressive pricing compared to
some states with no legal cannabis or only medical marijuana.
Relatively low wholesale prices for cannabis farmers around the state have also provided an obvious incentive for
many growers to play in both the legal and illegal markets-or to stay completely in the illegal market.
The Emerald Triangle in particular-comprised of Humboldt, Mendocino and Trinity counties-has been the source
of illegal marijuana sold around the U.S. for decades. Given how much those farmers can still sell their cannabis for in
states that maintain prohibition, such as Texas, that's not likely to change any time soon.
you take it out to your buddies and sell
it in their living room. That is how the
market is operated. So legalize that, "
Plenty of illegal operators still ship marijuana to East Coast markets, such as New York, where they can often fetch
even higher prices than marijuana grown in nearby Massachusetts which has a legal rec market, simply because of
the California brand and quality.
Goldsberry said.
" It worked fine-really great, actually.
And as those companies get bigger, they
can graduate into their own spaces. And
it was really a good scheme. "
These programs no longer exist,
however, and the companies had
to close-although many probably
continued operating illicitly,
Goldsberry said.
VARIED LICENSING OPTIONS
Zachary Pitts, the president of Ganja
Goddess, which operates a statewide
delivery service in California and a
Seattle recreational store, agreed more
licenses would be helpful-but not just
any kind.
" If you don't offer them an option
to operate legally, they're not going to
operate legally, " Pitts said. For example,
Debby Goldsberry
Washington state doesn't allow delivery,
so the illicit market is almost exclusively
conducted by dealers who meet buyers
in homes or on the street-unlike
California, where that situation also
exists but there are many unlicensed
storefronts serving customers.
Pitts believes that if Washington
state allowed deliveries, the practice
would seriously hurt the state's illegal
50 Marijuana Business Magazine | August 2020
BALANCING ACT
Kris Krane, president of 4Front
Ventures, a multistate operator
headquartered in Arizona, agreed more
licenses would help, but he also issued
a warning: " When there is no interstate
commerce but too many licensed
vendors, you could end up with a glut of
product, " he said, pointing to Oregon,
which many industry observers believe
sends its surplus marijuana to states
with no legal cannabis market.
" It's kind of a balancing act, " Krane
said. " If there is too much production,
and the prices come down too much,
some of that might actually wind up in
the illicit market and put the programs
themselves in jeopardy. You've got to
find that right balance. "
Copyright 2020 Marijuana Business Daily a division of Anne Holland Ventures Inc You may NOT copy this report or make public the data and facts contained herein in part or in whole
16
market. " If Washington started licensing
delivery, they'd probably have a lot
more success in getting rid of the illicit
market almost completely. "
Texas
$245
$247
$321
$283
$327
$336
$343
Price Per Ounce

MJBizMag August 2020

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