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Why California Weed Prices Will Tank

The same thing that happened to wholesale cannabis prices in Washington & Oregon will happen in California but worse. Here’s the situation, not only is California huge, but California’s black market is larger than the combined black markets of Washington and Oregon when they legalized. Legal weed is the enemy of black markets because they simply cannot compete with the scale and industrialization of a regulated market. This competition leads to some unintended consequences, and we’ve learned this by building the largest wholesale trading platform for the legal / regulated industry.

At first, the black market will have lower prices because of a supply shortage on the legal / regulated market. As more licensed facilities come online, retailers in the regulated market will push wholesale prices down to compete with the black market. The price competition is crucial to increasing sales at retail shops.

It won’t happen all at once, but you’ll notice one or two shops go aggressively towards the low price high volume model in each big city. Uncle Ike’s is the best example of this in Seattle. This will force the other shops in their surrounding areas to compete on price. As much as we, as an industry, want to think that providing a high quality experience will be able to help sustain higher prices, it won’t. The shops that can push their prices lower will be able to scale up the experience while continuing pushing prices lower using their new found buying power.

This is the point when some people will make a lot of money, and as a business, this is the most important time to execute.

Industry growth will be unstoppable for the next 24-36 months as the regulated market continues to eat into the black market. Prices will be pushed lower and lower increasing the overall marketshare of the legal / regulated market. Consumers will grow to love the variety, safety, convenience, and price of the new market, and this is when things will take a turn for the worse if you’re a farmer.

Somewhere between 24 & 48 months after legalization, every farm will be scaling up as fast and as furiously as possible to keep up with demand. This is when we’ll hit “Peak Marijuana” and the end of a crazy growth spurt created by the regulated market competing and winning over the black market. At this point, total consumer sales will plateau. The total volume sold may continue to rise, but the price per gram will continue dropping.

Many people will go out of business, and the ones who survive will be the operators who push for efficiency, lean up their operations, and learn how to produce more with less. In Washington, when the market was at its “projected bottom,” wholesale prices actually dropped another 35%. Currently, the wholesale price of indoor flower testing above 20%, unpackaged, is between $0.97 and $1.22/g or $440 – $553/lb. See our Washington Marketplace Analysis for Statistics.

Eventually prices will stabilize once growth stabilizes. Until then, buckle up and hold on for the ride!

As always, we’re here to help. Call us or register on the marketplace to see how we can support the growth of your business whether it’s through buying or selling.

  1. Wholesale Prices will Spike (Initially)
  2. Retail shops are going to need to increase sales because everyone is still buying on the black market
  3. Retail shops will push prices lower to become competitive due to black market and regulated market pressure
  4. This lower price at the retailers will dramatically increase retail sales and increase demand on the wholesale market
  5. Some people will get very rich if they play their cards right
  6. The industry will hit “Peak Marijuana”
  7. Growth will slow and prices will drop significantly over a short period of time
  8. People will go out of business
  9. Price and volume will stabilize

If you don’t think the legal / regulated market will win, you’re wrong. Think about it. The regulated market has access to outside capital, consumer support, and the backing of the state. This last point is the most important, as soon as the regulated market starts to complain about the black market there will be a crack down from the state. It won’t be pretty. Plus the more sales going through the regulated system equals the more tax dollars into the state’s coffers. If you’re just getting your feet wet in California, look what happened in the other states and make a plan now. Call a couple of operators in each state, ask them about their sales over-time, and ask for an honest opinion.

Why California Weed Prices Will Tank The same thing that happened to wholesale cannabis prices in Washington & Oregon will happen in California but worse. Here’s the situation, not only is

California marijuana prices: Here’s where to shop now

Overall you can expect to pay an average of around $14 a gram or $268 an ounce in California.

That’s a little less than you would have paid at this time last year, and it’s a lot less than you would have paid in 2018.

When recreational cannabis became legal on January 1, 2018, cannabis prices skyrocketed in California. That was largely because of the 15% excise tax on recreational marijuana, not including local government taxes. In some counties, taxes added on another 40%.

As we’ve seen in other states, cannabis prices fall once a state settles into cannabis legalization.

That’s not to say that the cannabis market in California is all worked out. There are still some significant challenges. According to many experts, taxes are still too high. Plus, more retail outlets are needed to build a functional marketplace, the illicit market is still thriving, and many municipalities across the state are reluctant to issue licenses for cannabis business.

Overall, however, things are far better than they were for the cannabis market in California than they were in 2018 or 2019.

Keep in mind that the prices below are average California marijuana prices. Savvy shoppers can almost always find better deals. Use our our cannabis shopping tool to find dispensaries, products, deals and more near you.

Covid and California cannabis

Generally, cannabis stores are open in California, regardless of the stay-at-home order issued statewide on March 19. Officials deemed cannabis “essential.” Check your local county rules.

Finding a legal shop

There simply aren’t enough dispensaries in California to keep up with the demand.

That means it’s easy to come across unlicensed shops selling products that could be contaminated with pesticides, mildew, parasites or mold.

We only list licensed dispensaries on MarijuanaRates.com. But it’s important to ask the store if their licensed before you buy. Ask to see their license number.

And here’s a quick way to find out if you’re visiting a licensed dispensary: Legal cannabis shops should have an emblem on the store front with a QR code. You can pull up the camera on your smartphone, scan the QR code and click the notification to check out the shop’s licensing info.

Don’t see a QR code? Visit CAPotCheck.com and search shops.

Cannabis in Los Angeles

It’ll cost you an average of $14 per gram in Los Angeles overall, or $283 per ounce.

City Store Name Average Price Per Gram
Los Angeles The Kind Center $18
Los Angeles MedMen $17
Los Angeles Green Earth Collective $12

Cannabis in San Francisco

If you’re in the market for a gram in San Francisco, expect to pay an average of $17. You’ll spend more like $329 for an ounce. But you’ll find some dispensaries offering a gram for as low as $11 on average.

Here are some of the recreational dispensaries currently open in San Francisco:

City Store Name Average Price Per Gram
San Francisco The Apothecarium — Castro $17
San Francisco The Apothecarium — SoMa $17
San Francisco The Barbary Coast $16
San Francisco Grass Roots $15
San Francisco The Green Cross SF N/A
San Francisco Harvest Off Mission $14
San Francisco Harvest Off Geary $14
San Francisco Medithrive $18.50
San Francisco Purple Star MD $16
San Francisco Relief Herbal Cooperative $15
San Francisco Sffogg $17
San Francisco Shambhala Healing $18.50
San Francisco Sparc $16

Cannabis in San Diego

The average for a gram overall in San Diego is $16 or $290 for an ounce. San Diego, not surprisingly, is one of the more costly areas for cannabis consumers, right behind San Francisco. The average for a gram in this city often hovers around $16. Still, you can find some dispensaries in the area offering a gram for an average as low as $10.

Here are some of the recreational shops currently open in San Diego:

City Store Name Average Price Per Gram
San Diego THCSD $19
San Diego A Green Alternative Cooperative $18
San Diego Mankind Cooperative $19
San Diego Golden State Greens Point Loma $13
San Diego Torrey Holistics $18
San Diego Urbn Leaf $16

Cannabis in San Jose

If you’re shopping around in the San Jose area, you can expect to pay an average of around $15 per gram. Look for dispensaries offering a gram for as low as $12 on average.

You can expect to pay around the same for adult-use in the area.

Here are some of the recreational shops currently open in San Jose:

City Store Name Average Price Per Gram
San Jose Airfield Supply Co. $13
San Jose Buddy’s Cannabis $14
San Jose CA Collective $13
San Jose Caliva $14
San Jose Canna Culture Collective $21
San Jose Elemental Wellness $13
San Jose Harborside Health Center $16
San Jose Purple Lotus $18

The future of marijuana prices in California

Later this year, we could potentially see a drop in marijuana prices as more dispensaries open to meet demand. This scenario played out the same in states like Washington, Oregon and Colorado when they legalized recreational use. Prices jumped up, and they slowly crept downward in a faltering pattern.

However, that’s pure speculation.

Higher prices might push you to think about buying cannabis on the black market. But we encourage you not to take that route. Black market cannabis can contain pesticides and mites that are harmful to your health. You’re better off in the long-run shopping at a dispensary that lab tests its cannabis products for pesticides and other toxins.

California marijuana prices vary by city, strain, season and other variables. But here's what you can expect to pay in your area of The Golden State.