In the U.S., a growing number of states are legalizing cannabis or are at least discussing legislative reforms.
Maybe you are in a state or in a country where cannabis legalization is in the works and it’s just a matter of time before it becomes law. What should you expect?
Leafly has been covering the rollout of cannabis retail stores and legal producers for years, and it has observed recurring issues, cycles, and patterns pertaining to legalization in various states and provinces. Here’s what they have noted about every new legal cannabis market:
1. Initially, cannabis will be outrageously pricey.
Everybody’s going to be excited to get their hands on legal weed for the first time, so demand would be intensely high during opening week. Because of this high demand, legal weed will be expensive.
Moreover, you can expect the price of weed sold at licensed dispensaries to be higher than the weed you get from the street or those sold in the black market. This is because a lot of costs go into producing and selling these products legally. For one, retail stores need to apply for licenses before they can sell, and these licenses are not obtained for free. These stores are also required to get their supply from licensed growers or producers, who also have to pay their own application fees. And that does not end there. Before these products can be distributed, they need to be tested by accredited third-party testing facilities. So you can expect laboratory costs to affect the final retail price, too. And guess what? Legal weed is taxed… so you get the drift.
Illicit weed, on the other hand, is not subject to taxes, not tested, not produced by licensed growers, and not sold at licensed dispensaries. So there really isn’t a lot going on in terms of costs.
The good news is that demand will gradually go down, so prices will also eventually drop.
2. There will be shortages of cannabis products.
While the demand is high, especially during the first weeks of the legal cannabis market, supply would be very limited. There won’t be enough cannabis products on store shelves for everyone lining up outside the door.
Why is this high-demand-and-low-supply the usual scenario? Because licensed dispensaries are required to obtain their supply only from licensed producers or growers. And these growers do not really have a lot of cannabis to go around because cannabis plants do take time to grow.
3. Some consumers will stay with the black market.
Again, weed sold illegally is a lot cheaper than the legit one, so old users who are already happy with their usual products would rather stick with their old vendors.
Over time, however, users would see the error of their ways and switch over to the licensed sellers when the prices drop. The more educated users become, the more they will realize the need to get clean, tested, and safe products. And when this happens, illegal dealers will eventually go out of business.
4. There will only be a few dispensaries open.
The state’s regulatory agency is still new and is still getting the hang of the job. So, naturally, it takes time for them to process applications for licenses — including doing background checks, interviews, and site inspections, as well as going over the financial aspects of things. Consumers, however, should take it as a good sign if officials and regulators are not rushing the process and are taking their time to do their job well.
5. There will be many towns and municipalities that will opt out of legalizing the pot market.
There will be many rural towns, municipalities, counties, and other local jurisdictions that will decide to continue banning cannabis. This is mostly because many local officials have less experience with cannabis and have more fear about the drug. These bans are more of a knee-jerk reaction to the new law than a willingness to investigate the matter more thoroughly.