It feels like we’re finally triumphing over the ugly, reckless ganja witch hunt. We’ve certainly won many battles. But, we haven’t won the war yet.
Currently, there’s a massive difference between dispensary prices VS street prices, and it sucks.
Read on to learn why buying legal bud is more expensive.
Street Weed Is 100% Cheaper Than Legal Cannabis In 2022
Let’s look at some stats.
Back in 2016, in California, the price between illegal and legal marijuana products was significant but not insane.
An ounce of cannabis would sell for:
- $218 in the streets vs.
- $299 in legal dispensaries.
Meanwhile, the cannabis industry is expected to reach the mind-blowing $32 billion in annual sales in 2022.
But the competition with the black market doesn’t seem to end.
In 2021-2022, the average price for an ounce of high-quality dispensary ganja is about $450. The same amount sells on the street for an average of $220.
For any cannabis user out there, the gigantic difference between street prices vs. dispensary prices certainly makes illegal weed offerings a very tempting option.
However, street weed definitely cannot compete with the quality offered by dispensaries.
Below, we’re discussing all the reasons that make up the HUGE difference in prices.
Dispensaries Are Heavily Taxed
Okay, this one seems like a no-brainer, right?
Did you know that cannabis was so popular in ancient Egypt that the Roman Emperor Aurelian imposed a tax on it?
Oh well, they say history tends to repeat itself.
Nowadays, there’s a myriad of taxes imposed on the legitimate sale of marijuana.
This, among other factors, contributes to why many people continue to purchase marijuana from the illegal market.
Ultimately, pot taxes apply to the purchases of cannabis for recreational use.
Meanwhile, there are still taxes added to medical marijuana.
But fortunately, these are lower. In fact, they are not considered a “marijuana tax”.
These particular taxes remain close to the state’s general sales tax rate.
It’s important to note that recreational cannabis is legal and taxed in 18 states as of 2022.
Moreover, there are 7 states where recreational ganja is legal, but the market hasn’t been established yet.
At A Glance: The Most Common Types Of Marijuana Taxes
- Taxing the price of the product.
These taxes are similar to general sales taxes. However, they are levied at higher rates for marijuana than the typical sales taxes.
Mhm, just another bummer in the why-do-I-have-to-pay-such-a-high-cost-for-my-sweet-weed list.
- Taxing the weight of the product.
This works similarly to the taxes imposed on a pack of cigarettes.
- Taxing the potency of the product.
Simply put, the higher the THC level, the higher the tax. This resembles alcohol taxes.
Ultimately, the percentage-of-price tax varies among the different states. It’s the same with all other taxes since some states use more than one of the above taxes.
In 2022, the average excise tax levitates around 10% – 20%. But then again, these are just some rough numbers.
Alaska seems to be one of the states with the heaviest taxes
- $50 per ounce of flowers.
As a comparison, California’s weight-based tax is
- $9.65 per ounce of flower.
You can clearly see that there’s a tremendous difference in the total tax across states.
That’s without even mentioning the extra taxes on the retail purchase price, which every state can choose to additionally levy.
Let’s take a deeper look at other factors that make street weed much cheaper than weed at dispensaries.
Street Dealers Aren’t Regulated
Honestly, some of my best bud buddies over the years are none others but my ex-street dealers.
However, here are some straight facts:
Street sellers are having a much easier time than regulated dispensaries nowadays.
This sucks because it negatively affects the legitimate sale of marijuana.
Since street dealers are not regulated, they operate outside the law. This allows them to make even more money than any reputable dispensary out there.
Moreover, all of this becomes a vicious spiral that instead of promoting legal marijuana use, we end up in the same place we were before the legal market.
1. Minimum Expenses
Mhm. The bare minimum, el patron.
Dispensaries need to cover large ongoing expenses, such as rent, staff wages, and staff training, among others. For the record, annual real estate expenses for a dispensary can hit $100 000.
Cannabis brands also need to invest a lot of money into product branding, website maintenance, as well as research and development, just to name a few.
2. No Need To Pay For 3rd Party Testing
Street dealers don’t have to spend a dime on the high-cost 3rd party lab tests. But legal, reputable brands are inevitably subjected to these expenses.
After all, 3rd party testing offers Certificates of Analysis, which is the only guarantee of the product’s potency and safety.
According to research, the average testing cost per sample is:
- About $313 for large labs,
- $537 for medium labs,
- Approx $778 for small labs
Needless to say, this affects the final prices of the products in dispensaries.
With street dealers, it’s just the good ol’ scenario:
Pick up the phone, schedule a meeting, drop that baggie, and gimme a friendly tap on the shoulder.
3. NO Taxes Of Any Kind
Literally, just zero taxes, amigo.
Now you can make better sense of how street dealers manage to keep much lower prices than dispensaries.
Furthermore, this leaves a massive opportunity for high margins while the price remains cheaper than dispensary weed.
Top Shelf Exotic Weed Increasing Prices
I start mouthwatering just at the mere mention of top-shelf exotics. We’re so-o-o lucky to lay hands on exclusively bred weed strains.
But on the low side of the exotic weed tide…
- Those one-of-a-kind strains developed through years of experimentation and breeding have driven some prices up.
There’s no other way around it.
Breeding a high-quality cannabis strain is a rather time-and-effort-consuming endeavor.
It requires extensive knowledge, proper equipment, and sometimes, years of experimenting!
High time to discuss some exotic weed genetics like it’s HOT (because it really is, wow).
Exotic Lessons: Cookies and Lemonnade From Berner
Berner is one of the living legends on the ganja scene.
He’s a role model to many, with his never-ending passion and deep, personal experience-based understanding of all things cannabis use-related.
Berner started his ganja journey literally from the bottom. After working as a dispensary staff himself, he ended up managing a half-a-billion-dollar business.
Enter any LA dispensary, and you’re sure to notice Cookies strains on the shelves.
Reaping huge success with the Cookies brand, Berner extended the top-shelf genetics to more sister brands, such as Lemonnade, which focuses on Sativa-dominant superbuds.
One of the underlying promises of the top-shelf weed by Berner’s brands sums down purr-fectly the benefits of high-quality dispensary weed:
- “An eighth of Cookies bud might last you longer than your average eighth of flower”
Some of the gemstones on the Cookies brand menu include:
A potent Indica that teleports users to a secret fantasy beach, where one can enjoy the sunset while sipping a glass of rose wine (no hangover attached!).
Also known as Runtz OG, this is a rare hybrid that every cannabicionado would enjoy having in his go-to collection.
With its aww-mazing fruity profile and frosty nugs, Runts was voted the 2020 Strain of the Year by Leafy.
Another potent strain that will unleash your inner roar! Cheetah Piss is a cross between 3 parent strains and is a real keeper.
The funky, ammonia-like notes give it a distinct character. Most users praise the highly uplifting, aroused, giggly effects of this dispensary starlet bud.
Calfornia-native cannabis seed breeder Christopher Lynch is one of the masterminds behind Compound Genetics.
The unique cannabis varieties bred by Compound Genetics are described as
“elite representations of smell, taste, and experience.”
A real big banger on the Compound Genetics lineup: Jet Fuel Gelato
With deep notes of moist earth and sweet cream, this unforgettable taste buds-pleaser takes you on a dreamy pine forest walk.
Jet Fuel Gelato has become the parent strain of many rising superstars, such as Marshmallow OG, Horchata, High Society, First Class Funk, Krypto Chronic, Life Hack, and MORE!
Demand, Supply & Inflation
In 2022, Inflation is the highest it’s been in 40 years in the states.
Actually, the whole world is experiencing waves of high inflation. This corrupt equation has no end or any resolution in store.
Also, let’s not forget that the last few crazy years have deeply affected logistics networks, including cannabis.
Currently, prices in all possible sectors keep on increasing.
Also, stats show that the cannabis demand hasn’t decreased either… at least not yet.
Demand is likely to keep rising with the acceptance of cannabis and the ongoing legalization.
But increased demand doesn’t necessarily mean lower prices, especially when we talk about a young and still shaping industry, which is the case with the ganja industry.
Going Deeper Down The Rabbit Hole Of Endless Paradoxes
In late February 2022, CNN outlined that the cost of legal cannabis doesn’t seem to be increasing at the same rate as other goods affected by the high inflation.
So, legal cannabis may actually cost less these days. But simultaneously, it costs A LOT, doesn’t it?!
Told you it’s paradoxical.
Major Street Dealers Have Volume
Ever watched any of the Narcos episodes on a Netflix-and-Chill hazy-lazy night?
If so, then you already fully understand what this section here is all about
(*inserting some patented hazy-gangsta-looks amidst clouds of smoke*).
Cartels supplying large dealers have huge volume advantages. So huge that it makes it quite impossible for dispensaries to compete with the big street bosses.
Dispensaries would be buying for 1 dispensary or 2 or maybe even 10 stores, while the well-established cartels could easily supply hundreds of dispensaries in a breeze. This reduces street prices further due to economies of scale.
All of this is very unfair, as it harms the dedicated, legal ganja growers who are putting so much into sustaining their business.
Legal growers open up new jobs and thus, they support many people and their families to have a decent income.
This alone should be a big motivation for us, ganja users, to stick with purchasing legal weed.
How about some good news amidst the global chaos?
The growing competition in the cannabis industry is bound to drive prices down in the foreseeable future (sooner than later, hopefully).
But the ongoing legalization of weed is still facing many challenges. So, dispensary prices remain quite higher than street weed deals.
We do have a secret superpower, though. It’s called: making a CHOICE.
Choose to approach marijuana use as a conscious user.
Even at higher prices, purchasing marijuana from a dispensary offers unparalleled quality and benefits the entire ganja tribe, as well as the legalization process itself.