States with Legalized Marijuana See Prices of Wholesale Cannabis Increase

States where marijuana has been legalized are seeing an increase in wholesale marijuana prices. According to a recent article by The Motley Fool, investment bank Stifel’s call for a $200 billion in global annual weed sales within a decade, which is poised to bring the annual growth rate to 34%, may influence the increase in wholesale cannabis prices.

However, even though “everyone [is] wanting in on cannabis,” there is oversupply in several states, including Colorado, Washington, and Oregon. This oversupply, coupled with high tax rates in the states with oversupply issues, may influence a reduction in cannabis prices in those states.

Despite these challenges, there are also signs that just recently, wholesale cannabis prices are on the rise. A report by Seaport Global addressed in a Marijuana Business Daily article, shows an increase in prices in states where legalization is well-established may be due to factors such as stronger demand and weaker supply, growers going out of business, farmers turning to help, and cultivators holding onto product in hopes that the market will become more favorable. Further, the report indicates that wholesale marijuana prices have increased by 100% in Oregon, 46% in Washington, and by 17% in Colorado.

The report also specifically discusses prices in Oregon. According to the report:

“In Oregon, there have been reports that quality from the 2018 crop was low, leading to higher 2019 pricing as a result. Additionally, a related shift towards higher-cost indoor product exacerbates the situation.”

In addition, Oregon growers may also be stockpiling their supply.