By Jason Marcuz
On July 1st, 2017, the purchase of legal marijuana became legal in the state of Nevada. Sales of recreational marijuana have gone up since, with demand far surpassing supply. As it is, the market is unable to keep up with the current demand. According to industry insiders, everyone is now stocking up, and cultivators are inflating prices.
A 200% Increase in Price
There are a couple of distribution issues that have caused prices of marijuana to skyrocket to 200%. In only one month since legalization, the prices have dramatically shot up from $150 per pound to $450. According to Brayden Sutton of Friday Night Inc., all the marijuana products they produce are selling off the shelves immediately. These include edibles, pre-rolled joints, and marijuana flower.
Friday Night Inc. owns a subsidiary that grows and produces cannabis products. The initial problem that the Nevada market suffered from was that there were only two distributors who served the local retail outlets. Today, most retail outlets are struggling to meet demand as many distributors remain unlicensed.
Cultivators Struggling to Meet Demand
Cultivators across the state are selling out and unable to meet current demand. According to Mr. Sutton, pot retail stores are unable to keep their shelves stocked continuously. They are also unable to meet growing customer demand. Nevada currently has over 88 approved pot cultivation centers but a limited number of licensed distributors. The state did not issue enough cultivation licenses, yet the production cycle from seed to weed is untimely. Plenty of players had foreseen this problem when demand for marijuana products quadrupled overnight.
Alcohol distributors had sought rights to be the only marijuana distributors in the state. Not everyone was of this opinion, and the matter was taken to court. A judge ruled that other applicants could be accepted and approved to be weed distributors.
Weed Dispensaries
According to Joel Milton, a marijuana interest group in Nevada, most dispensaries, and other marijuana outlets are experiencing 200% – 300% increase in customer numbers with most being recreational rather than medicinal users. Many customers prefer discrete and more conventional products such as pre-rolls and vape pens.
State taxes are playing a huge role in the cost and availability of weed in Nevada. While anyone can buy marijuana for medicinal and recreational use, getting a medical marijuana card is a good idea. Card users pay an additional 10% in state taxes while the rest pay up to 30%. A weed user who spends $200 – $400 per month may pay close to $300 annually in state tax which is a lot of money in this economy.
