It’s no surprise to Seattle stoners that we have access to incredibly cheap pot. Legalization has seen its price plummet in Washington to a fraction of what it was selling for when legal weed first went on sale in 2014. But a new report shows Washington has remarkably cheap weed even compared to other states that have legalized pot.
The report, released this week by Seattle data firm Headset, found that the average pot item in Washington cost $15.33, less than half of California’s average of $30.90 per product. Colorado and Nevada’s average prices per product were $23.95 and $26.94, respectively.
Headset’s report highlights the unique structure of Washington’s cannabis market. Washington is one of the only states with legal weed that does not allow pot farms to sell their weed directly to customers. Farms must instead sell their products to retailers who then can sell to customers. The state licensed over 1,200 pot farms and processors but handed out less than 500 licenses for pot stores—that uneven marketplace has forced farms to compete with each other to get their products onto retail shelves, dropping the price of pot down with it.
Headset’s report said this market structure was responsible for Washington’s cheap weed.
“Washington has thousands of distinct cannabis brands, and a “tiered house” market system that gives retailers a lot of power to push back on price. The result is a lot of affordable cannabis products,” the report said.
Washington's cheap pot is even more remarkable when you consider that our state has some of the highest pot taxes in the nation. We pay a 37 percent excise tax on pot, in addition to other local sales taxes. In Seattle, that works out to a nearly 47.1 percent tax on pot. Colorado only has a 15 percent excise tax, plus a sales taxes, which works out to about 29 percent tax rate in Denver, according to Reason.com.
The report contrasted Washington's competitive tiered system with Colorado, which has been running a legal pot market for longer than Washington but still hasn’t seen the same drop in prices.
“Colorado’s system allows for vertical integration, so even though it has seen prices come down over the years, the brand landscape is less hotly contested,” the report said.
The one area where Washington didn’t have the cheapest type of pot is the price per gram for flower products. Colorado averaged a $4.60 price per gram while Washington averaged $4.90. Nevada and California were far higher at $13.70 and $11.60 per gram, respectively. Colorado’s processed weed goods were significantly more expensive. The average concentrate costs $15 in Washington and $23 in Colorado. The average cost for a vape pen cartridge is $36 in Washington and $55 in Colorado.
Headset used their proprietary data set of over $4.5 billion in transactions at pot shops to generate the report. The Seattle start-up has technology that connects to retailers’ point of sale systems, allowing an inside view of the retail pot industry. Headset recently announced that they are partnering with the national research company Nielsen Holdings to study consumer trends in the U.S. cannabis market.
Headset’s recent report didn’t just focus on cheap pot. The company found that the market has clearly divided itself into different tiers based on quality, with some brands attaining more luxury status. The report found that 18 percent of eighths and 15 percent of single gram packages sold in legal markets were in a “super premium” price tier, which is the top 20 percent of the market based on cost. The authors said this demonstrated that “There is such a thing as super premium pot now.”
If Seattle stoners are looking for even cheaper prices, they probably shouldn’t hold their breath. Headset’s report said that Washington’s prices are already so low that there’s essentially no more room for them to drop. Which sounds about right given what I’m seeing out around Washington, with retailers reducing prices to ridiculously low levels, like $1 pre-rolls, $5 eighths, and even $40 ounces. Just look at this guy: “40! Dollar! Ounces!”