Marijuana price takes a plunge much to the dismay of experts who forecasted otherwise. Even with a fast growing customer base, marijuana prices drop could be alluded to the fact that the supply is high with less demand. OR the reason could be entirely something else.
Marijuana Price: Breaking Numbers for Investors
ArcView, a desktop geographic information system, estimated that legal marijuana sales could hit the $6.9 billion mark in the year 2016. It also estimated that it will continue to grow by 30 percent by 2020, Madison reported. Even when 87 percent of the entire sales come from the black market, the legal sale of marijuana is forecasted to surge higher.
But it could deteriorate with the present figures. Numbers don't lie and it shows that there's a 60 percent dive of marijuana prices on wholesale in 2016. CannaSaver CEO Brian Shapiro confirmed this when he said wholesale marijuana price dropped to $1,000 per from $2,500 per.
This drop is far more evident in Washington since 2014. Marijuana price is at $25 per gram. After a year it's $10 per gram. In October 2016, marijuana price in Washington fell by 40 percent at $6 per gram.
This gave way to a tax revenue problem on states where Marijuana is legal, The Daily Mail reported. That's because if states like Washington and Colorado collect tax revenue based on marijuana sales. Naturally if there are fewer sales, then there's less tax revenue to be collected.
Why Marijuana Price Took a Dive
Marijuana and financial experts say the culprits for this are the big businesses putting their money in the marijuana industry. They are growing more marijuana than creating more demands for the addictive substance.
This has made it very difficult for small businesses to pull off as well because they can't compete with the big boys by taking loans from traditional banks. The reason for that difficulty is the fact that marijuana legalization is still underway. This problem is non-existent with the big businesses of course.
Big time growers are flooding the market with more cannabis than they can consume. Those who were agreeable with marijuana legalization feared that the entry of these large businesses will squeeze small players out, and it looks like it's really happening.
With a weak potential to help the economy, why would a state legalize marijuana? But there's a plus side to this for those who want to invest in the marijuana industry. If small players will be eliminated from the game, marijuana stocks could be created.
