The Massachusetts cannabis industry is facing significant financial strain as marijuana prices have dropped dramatically. Since November 2018, retail prices have fallen from $14.09 per gram to $5.36 per gram in 2024, a 62% decrease.
Factors Contributing to Price Decline
Several elements have led to this downturn:
• Increased Cultivation Licenses: The Cannabis Control Commission’s approval of more cultivators has resulted in an oversupply, driving prices down.
• Legalization in Neighboring States: With states like Connecticut and New York legalizing cannabis, out-of-state customers are no longer traveling to Massachusetts, reducing demand.
• Purchase Limits: State-imposed daily purchase limits of one ounce per customer restrict sales volume, impacting revenue.
Impact on Businesses
The price drop has led to financial instability for many operators. In 2024, 30 licensed marijuana businesses ceased operations, doubling the number from the previous year. Currently, approximately 650 licensed cannabis businesses operate in the state.
Some industry leaders suggest measures such as increasing purchase limits and pausing the issuance of new licenses to stabilize the market. However, opinions differ on intervention strategies. Robin Goldstein, director of the Cannabis Economics Group at the University of California, Davis, views lower prices as a positive development, indicating a competitive and maturing marketplace that can outcompete the illegal market.
H/T: merryjane.com
