Americans are paying more than ever for essentials. Grocery prices are up 30 percent since 2019, and appliance costs have continued to rise since an 11 percent spike in 2022. However, at least one thing that isn’t getting more expensive for those in Arizona: weed. The price for regulated cannabis products has hit an all-time low for an unfortunate reason.
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Arizona legalized adult-use cannabis with the passage of Proposition 207 in November 2020. Now that it is legal, the industry has grown creatively, from chef collaborations to community-driven events. Unfortunately, Headset tracked an intense market contraction in the last year—over a 20 percent drop in sales, to be exact. Arizona Department of Revenue data supports this decline in total sales that has been teetering back and forth since mid-summer.
While not great news for cannabis producers, this has led to a steep drop in the price for buyers, according to an azcentral report. A dispensary manager told the news outlet that the cost per pound dropped from $2000 or more for top shelf flower to $400-700. This directly impacts how much the product will be sold for.
One look at menus for popular dispensaries in Phoenix, Ariz. shows eighths and 100 milligram edibles priced at $10. In 2023, an eighth ran $28-49. While consumers live it up in the weed regard, the industry might experience a mass consolidation in response.
The growing hemp space is also taking the blame for a decline in taxed cannabis sales in many states. Hemp THC drinks are sold at grocery stores, and other products are easily purchased online for nationwide delivery. Availability is not the only reason these products gain consumer interest. They aren’t subject to the 16 percent cannabis tax applied to regulated dispensary sales.
Wana, a brand founded in Colorado in 2010 that eventually sold to Canopy for millions, entered hemp in a big way. The brand released a line of hemp-derived Delta-9 products alongside a multi-brand marketplace. Green Thumb Industries now sells hemp products as well. The MSO recently penned a partnership to serve them at Chicago concerts for the next two years.
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The Arizona Attorney General issued a statement on the illegality of selling hemp-derived intoxicating substances in the state, but e-commerce was not mentioned. There is no proof that hemp has played a role in Arizona’s lower-than-ever prices, but it is a viable candidate. These benefits have drawn in customers, new and old. However, hemp THC does not offer the same variety and quality of inhalables like cured flower and concentrates. Those who shop these products will likely stick to regulated bud.
A combination of factors has likely created the hefty decline in the price of pot products. People are pinched for cash after groceries and other purchases and may not be racking up the weed tab right now. Mix in that some customers are trying hemp products instead, and the decline makes sense. Whatever the cause, weed is inexpensive in Arizona at the moment. In the words of CNBC’s Jim Cramer, “BUY!BUY!BUY!”
