Prices of marijuana in USA. Paying taxes versus risking freedom
Although we all know that going to a dispensary to buy our cannabis has many advantages, we also know that buying weed from dealers is can be cheaper.
Dispensaries have more product variety. We can choose between dry flowers, wax, brownies and much more. In addition, you know what you are obtaining when you ask for legal cannabis. However, the prices are higher than we expected when cannabis was legalized.
The major advantage when you buy from street dealers is that you don’t pay taxes. And obviously this means cheaper prices, although it shouldn’t.
The states that have legalized recreational cannabis have an enormous disadvantage to compete with the street dealers: the taxes. And this fact allows the black market to continue operating.
According to the Tax Foundation, many states began with too high taxes in the beginning. Fortunately, they have reduced the amount applied.
Colorado, for example, has been changing its tax policy. Firstly lowering them and after increasing them again. A movement that has not been accepted among cannabis users and members of the industry who think that marijuana cannot be a solution for every budget problem.
As it happens in any other business, supply and demand are the two major factors to establish the prices. In some states such as Colorado and Washington, the beginning was too slow. There was a shortage of legal weed and the prices increased considerably.
Little by little more dispensaries were opened, which influenced in the stabilization of the prices and the regulations. However, the prices continue being too high.
When it comes to cannabis, buyers don’t think that buying from street dealers is wrong or immoral. Very often consumers buy the weed from a close friend who grows cannabis in his garage. The user gets good marijuana and he also does his friend a favor.
Of course, dispensaries always claim that it is not worth getting into trouble and that it is better to pay taxes than to risk buying from people outside the professional circuit. But the higher prices are and will be an incentive for those who continue to buy on the black market.
Dispensaries also attract people who don’t know where to buy. In addition, a good dispensary can explain the clients everything about the weed they buy. You can ask about terpene profile and THC/CBD ratios, for example. It is valuable information that street dealers cannot offer. How many street dealers can tell you this information?
In other words, many people don’t buy in the dispensaries because the prices are too high due to the taxes they have to pay.
It is a hard to say because neither the cannabis industry nor the black market has regular prices. The same strain can have different prices depending on the dispensary.
A gram of weed went from 15 dollars to 6 dollars in Washington three years ago. And in Colorado, the price of one gram went down from 8 dollars to a bit more than five in 2016. Later, in 2017, the prices rebounded again.
The state, the city and even the neighborhood where you live will have an influence in the prices of weed. Dispensaries located in high-class neighborhood will charge you more.
It is true that street dealers don’t have to pay taxes, but they risk their freedom too and that means an extra charge. Even though it is almost impossible to say, but the prices from street dealers tend to be 20% cheaper. Dealers sell to everyone, no matter if you are adult or under age. If they have something that everybody wants and cannot otherwise get, the price will increase.
Because of this reason, street dealers who sell in recreationally legal states can sell the weed for less money than those who sell in non-legal states. In these areas they fix the prices which inflates overall rate at a national level.
Clients who live in legal states can choose between the dispensary or the street dealer. But without the need of paying taxes, street dealers are usually cheaper than dispensaries. This is true. But their cannabis is usually worse too.