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Retail Oregon Prices Not Tracking Wholesale Drop

The news of the spring out of Oregon has been the plummeting of wholesale cannabis prices. Since just October of last year, according to some reports, wholesale prices have dropped by 40 percent.

Oregon cannabis consumers do, indeed, have reason to celebrate — their dispensary visits are increasingly lighter on the wallet.

But on the consumer side, at least, the drop in prices does not fully correspond with the wholesale situation. And for now, at least, price deflation in Oregon revolves mostly around flower. Some categories, like edibles, have actually experienced elevated prices during the past year.

During 2018 in particular we see the rise of under-$5 flower in Oregon.

First, the flower situation. During January of 2017, the average gram of flower sold in an Oregon dispensary cost $8.75 according to cannabis market research firm BDS Analytics. A year later, this past January, the average gram was $6.61. And in April of this year, the average gram of flower in Oregon set back consumers $5.77. The drop during the past 16 months is 34 percent. And close to half of that price decline has occurred since January — the first four months of 2018 saw prices dip 13 percent in the Beaver State.

Meanwhile, for sake of comparison, a gram of flower in Colorado in January of 2017 was $5.87. This past March, the average gram of Colorado weed was $4.96. The drop? About 15 percent. Coloradans did not enjoy price drops during 2018 at all — the price for a gram in January was $4.91, so prices went up between January and March.

While retail flower prices have experienced steep declines in Oregon during the past year, the same does not hold true for all other cannabis categories. In January of 2017, for example, the average cost of an edible in Oregon was $13.71. But in April of this year, the average edible in Oregon reached $16.24, a rise of 18 percent since last year. That said, as with flower, edibles prices have dipped so far during 2018. In January, the average Oregon edible cost $17.32.

Concentrates in Oregon have dropped substantially since January of 2017, when the average price for a concentrates product was $37.03. By April of this year, that average had dropped to $29.08, a decline of 21 percent. But while flower prices in Oregon are falling at an upped pace so far during 2018, and edibles prices fell during this year as well, concentrates are rising. In January, the average concentrate sold for $27.81. But in April, it had risen to $29.08.

When viewed as a whole, cannabis prices overall in Oregon have not fallen dramatically since January of last year, when the average price of all products — from a gram of flower to a cartridge to a sack of THC-infused cookies — was $10.61. In April of this year, that average had dropped to $9.14, a fall of 14 percent.

As the busy summer season unfolds during this banner year for cannabis, price-pressures on flower will persist. Will prices in Oregon stabilize? Experience a rise, as demand spikes (sales during summer are always at their peak)? Is the market indeed over-saturated with flower, and will the floodwaters rise even more, further depressing flower prices? We will continue to closely review retail prices across the year. One thing is for sure: prices for cannabis products remain dynamic both between and within states.

Doug Brown

Doug Brown

Douglas Brown spent more than two decades in newspaper and magazine newsrooms around the country, covering everything from the White House and Capitol Hill to technology policy to crime in New Mexico. Now, he runs Contact High Communications, a leading cannabis public relations firm based in Boulder, CO. He can be reached at www.contacthighco.com

This Post Has 2 Comments
  1. It’s called the demand curve. Supply costs don’t dictate price changes per se; consumer demand does. You cannot talk about cannabis pricing on the legal market without analyzing the non-reg market.and the impact pricing has on it. And the article doesn’t state whether these are pre-tax or post-tax prices. Obviously the post-tax price is what is important to the consumer.

  2. A MAJOR reason the price hasn’t gone down to customers, is the fault of the IRS.

    I know, I sound like everyone else that blames the government for everything. Allow me to explain. IRC 280E is a punitive tax code that negatively impacts cannabis companies. The current drop in wholesale price is simply making the price fall into line with what a dispensary must buy for, in order to sell at the current retail level to the customer at the same price as offered before.

    An Oregon shop used to pay 1600-3000 for a unit of cannabis ($4-7/gram), then at $10/gram they usual would make a 50% Gross Profit. People in other retail may think that is great, but now consider the dispensary’s lack of ability to claim business expenses like utilities, rent, payroll, delivery, advertising, etc. Once that is taken into account, MOST dispensaries would break even.

    So what is happening here is really a redistribution of wealth from the folks further up the value chain who get almost all of their deductions (grow and processing), to the people who own the shops, all courtesy of the Federal government.

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