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High Prices for Getting High Expected as Colorado Opens Legal Pot Shops

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  • High Prices for Getting High Expected as Colorado Opens Legal Pot Shops

    High Prices for Getting High Expected as Colorado Opens Legal Pot Shops
    Demand likely to outstrip supply at first as Colorado opens legal marijuana boutiques

    By DANIELLE KURTZLEBEN
    December 30, 2013 RSS Feed Print
    Comment (265)

    On Jan. 1, the first legal recreational marijuana outlets will open in Colorado. And with the rise of the new legal marijuana industry comes the question of what newly legal recreational weed should cost.

    As it turns out, new users might be best advised to wait a few months before buying their weed. Some experts and store-owners say that getting high in the mile high state will likely be expensive at first, with prices easing off as the supply of weed catches up to the demand from Americans hoping for their first chance to buy recreational marijuana legally.

    "I do expect the price to go up at least for the first few months," says Rachel Gilette, an attorney at Colorado's chapter of the National Organization for the Reform of Marijuana Laws. "That's only because the supply is going to be very limited and the demand has just jumped massively."

    Medical marijuana is already legal in Colorado, and many of the new shops will be medical dispensaries that have also obtained retail licenses. In some of those stores, retailers will set aside marijuana for medical patients, separate from that for casual users.


    "I did talk to a retailer yesterday who had just set his price points, and they were about double of what you have been able to get medical on the market for the last year," says Gilette. "So it is going to be more expensive at least for the foreseeable future."

    Even leaving demand aside, taxes will already push prices up for retail buyers. The state will impose total taxes of 25 percent on marijuana plus the regular 2.9 percent state sales tax, and local taxes will also apply on top of those. At Kine Mine, a store in the small town of Idaho Springs, for example, total taxes will come to 31.9 percent – 27.9 percent in state taxes plus 1 percent in county taxes and a 3 percent city tax, according to store founder Theran Snyder.

    But he expects he may have to charge recreational users even further above and beyond his medical marijuana prices to stay stocked. Medical marijuana patients can designate a dispensary as their primary center and thus become "members," who typically pay less than non-members. At the Kine Mine, a nonmember will currently pay $225 per ounce for medical marijuana. Though Snyder declines to give exact price points, he believes he may have to charge far more than $225 per ounce for non-medical marijuana to ensure that product stays on the shelves when the new law kicks in.

    "Obviously the way we're planning on controlling our inventory is with price, and unfortunately that means we're going to be charging a premium," says Snyder.

    At Lightshade, a store with locations in Denver and Aurora, the outlook is likewise uncertain.

    [ALSO: Teen Marijuana Use Hasn't Exploded Amid Boom in Legalization Support, Drug Survey Finds]

    "We're not exactly sure [where prices will go]. We're anticipating obviously a rush of people coming from out of state," says William, a store manager who declined to give his last name. He says the store may decide to raise prices for recreational users if they see enough demand. "We do want to keep product for our medical patients. They do come first."

    William currently thinks Lightshade will charge recreational customers the higher, non-member medical marijuana prices. According to its website, Lightshade currently charges $280 per ounce for members and $320 for non-members for its highest-priced marijuana. But there's no way to precisely predict what demand will look like, he adds.

    "I think [prices] could definitely fluctuate dramatically," William says, adding that it's possible he's overestimating how high initial demand will be at his store.
    I expect it will take years for prices to stabilize.

    US News
    "Alexa, slaughter the fatted calf."

  • #2
    Stupid!

    $225 an ounce? That just means the black market will get more legitimacy and defeat the entire point of legalization.
    "Faith is nothing but a firm assent of the mind : which, if it be regulated, as is our duty, cannot be afforded to anything but upon good reason, and so cannot be opposite to it."
    -John Locke

    "It's all been melded together into one giant, authoritarian, leftist scream."
    -Newman

    Comment


    • #3
      Originally posted by scott View Post
      Stupid!

      $225 an ounce? That just means the black market will get more legitimacy and defeat the entire point of legalization.
      Hell, back in the early 70's, I could buy an lb of primo Columbian for about the same price.
      We are so fucked.

      Comment


      • #4
        Originally posted by gary m View Post
        Hell, back in the early 70's, I could buy an lb of primo Columbian for about the same price.
        Oxymoron
        If it pays, it stays

        Comment


        • #5
          Originally posted by scott View Post
          Stupid!

          $225 an ounce? That just means the black market will get more legitimacy and defeat the entire point of legalization.
          It's mostly a supply problem right at the moment. Medical weed growers could only legally have so many plants per patient. When the laws changed there was a lot of uncertainty about Fed involvement, zoning, etc., so growers didn't instantly upsize their operations. At the same time all these medical growers were very protective of their patients so they've been very conservative in their surplus estimates. Growers want to prevent any price variations from hurting any chemo patient.

          It all adds up to an unstable market - for a few months, anyway. As more growers enter the market on the recreational side, prices for both types of weed will drop.

          I don't know if middle school weed dealers will ever go away entirely. Kids don't care about the sources or the quality so that market will probably stay the same.
          "Alexa, slaughter the fatted calf."

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