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DEMOGRAPHICS

You knew someone was going to throw out the D-word if you clicked on a link to a 'Trends' page, so I'll oblige you.  As trite and filled with consultant-speak as the word is, the demographics of the cannabis market speak to both its current and future usage.  For example, from Bank of America / Merrill Lynch, the chart below speaks volumes.

You knew someone was going to throw out the D-word if you clicked on a link to a 'Trends' page, so I'll oblige you.  As trite and filled with consultant-speak as the word is, the demographics of the cannabis market speak to both its current and future usage.  For example, from Bank of America / Merrill Lynch, the chart below speaks volumes.

Regulated Marijuana Market Product Pre-tax Price Trends

Adult use prices are declining in general. From 2014 through 2017, average annual adult use flower prices fell 62.0 percent, from $14.05 to $5.34 per gram weighted average. Over the same period, adult use concentrate prices fell 47.9 percent, from $41.43 to $21.57 per gram. Adult use infused edible prices hovered around $18.00 per 100mg package but have not exhibited a consistent trend over time.

 

Prices for medical marijuana products have declined over the past four years at a pace similar to the adult use market (in terms of percentage decline). Average medical flower prices fell 40.9 percent, from $5.55 per gram in 2014 to $3.28 at the end of 2017. Medical concentrate prices declined 34.6 percent, from $25.83 per gram to $16.89, over the same period, and the average price for a 100 mg medical infused edible hovered around $9.00.

 

Falling prices in both markets have several implications for consumers, producers, and governments. For consumers, lower prices mean more affordable marijuana,which will likely increase overall demand and total sales, but may also increase addiction and dependency rates.14 In most cases, producers and retailers operate with narrowing profit margins as prices fall, putting pressure on the less-efficient and often smaller businesses. Since sales tax revenues are based on retail prices, per unit tax revenues will fall as prices fall. However, public revenues will likely continue to rise if sales volumes are increasing overall. As market growth slows and prices fall, tax revenues will eventually plateau.

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