Legalizing marijuana has had a lot of positive effects in several states, but there's one up side that you don't hear about as much: Turns out, legalizing marijuana makes it cheaper. So if you live in a state with legal weed and you like to partake yourself, it turns out that it's good both from a legal perspective and in terms of your wallet. Congrats!
Now, it's worth pointing out that we only have data on marijuana prices from the state of Washington, and not from the other three states that have legalized marijuana (Colorado, Alaska, and Oregon) or from Washington, D.C. So it's unclear just how widespread this phenomenon is. But according to the Liquor and Cannabis Board in Washington, the price of marijuana has been dropping ever since it was legalized — and dropping rather sharply, at that.
In the short term immediately after marijuana became legal in Washington State, the retail price briefly spiked to from around $23 per gram to almost $25 per gram. Ever since then, however, both the retail and wholesale price has steadily declined. Today, a gram of marijuana costs only $9.32 retail and only $2.99 wholesale in Washington State. That's about a 25 percent decrease in price, which is not too shabby, all things considered.
So what's driving the price down? Well, it turns out that trying to run an illegal marijuana operation is a lot more costly than running a legal one. If you're trying to produce and distribute an illegal product, you have to pay your employees a lot more in order to make up for the potential for arrest. You have to invest in more safety measures and ways to avoid detection. Plus, there's no way advertise, which means it's harder to get customers in the first place. It all adds up to a lot of extra money. (And, y'know, it's also illegal, so there's that. Not recommended activity. Seriously. Don't break the law, people.)
The legalization of marijuana, however, means that growers and distributors don't have to cover those costs — which also means that they no longer have to sell the product at such a markup. It really is basic economics.
It also has some great benefits of its own. As the cost of legal marijuana falls, it puts a strain on any illegal marijuana enterprises still running the state, outside of state regulation. This is good because legal marijuana businesses have to do things like ensure product quality and verify the age of their customers. They're also a lot less prone to crime or violence, given that they're legal places of business. So if illegal ventures can't compete, price-wise, everybody wins.
Of course, falling prices could also have a less favorable impact on state budgets, if the falling costs lead to a drop in overall revenue. The sales tax from marijuana has had a lot of positive impacts in states that have legalized, and if they start collecting less money than expected, that could pose a challenge. But then again, a cheaper product could lead to more total sales, so maybe things will balance themselves out.
Either way, if you're living in a state with legal marijuana, you have some things to celebrate.