The recent rise of inflation is cause for concern for consumers and businesses all the way up the supply chain. Some of us may see the impact of inflation affecting our pockets while grocery shopping or at the hardware store – but are we also seeing cannabis inflation at our local dispensaries?
The industry-wide impact of cannabis inflation
According to Headset, median cannabis product prices haven’t risen from where they were a year ago, indicating that inflation may not be hitting the shelves like we’ve imagined it would. This is likely due to the basic economic tenet of supply and demand. In the early days of cannabis legalization, supply was short and demand was high. Nowadays, dispensaries finally have surplus products, giving them the ability to set and maintain lower prices for consumers.
To keep it simple, if inflation was directly impacting cannabis prices, we’d expect to see steady increases in pricing over time. However, in most markets, prices have either held steady or decreased. While inflation may not be hitting cannabis prices now, that doesn’t mean it can’t or won’t happen. The cannabis industry experiences rapid shifts and changes, which makes it difficult to predict trajectory.
What about cannabis inflation in Massachusetts?
Increased legal market supply may be driving down prices of cannabis at Massachusetts dispensaries, but as inflation still holds strong (dropping from a 40 year high of 9.1% in June to 8.5% in July), it’s a cause for concern for legal operators.
The cost of materials for manufacturers has significantly risen, along with materials needed to cultivate cannabis. But since the majority of Americans are pinching their extra pennies to make up for the cost of fuel, food, and goods, consumers simply don’t have the budget to put towards higher priced cannabis products. Leafly reports, “Both growers and retailers seem locked in to current pricing levels at the moment, afraid to raise prices even though their expenses are increasing.” Higher costs of production, but stagnating costs of products in dispensaries is decreasing margins for growers and manufacturers, but despite this, dispensaries are wise not to raise prices, as doing so may push out consumers with little extra budget.
Will consumers stop buying cannabis altogether?
Likely not. In fact, Bud’s Goods founder, Alex Mazin, noted to Grow In, “I think ultimately consumers are not saying, ‘Oh, I’m not going to consume cannabis.’ But what they are saying is I’m going to a new source to get it at a lower price.”
Even though flower prices have hit an all-time low, dispensaries need to consider several factors when pricing their products, including very high tax rates. The concern among the legal market in Massachusetts is that if consumers have very little budget to work with after paying for essential needs, they are more likely to turn to the illicit market for their cannabis products. Legacy market businesses are not subject to the same regulations and taxation as legal operators, therefore they are able to maintain low prices despite rising costs.
If anything, higher pricing across the board will cause the illicit market to thrive, while legal operators suffer decreased sales.
Bud’s Goods is good buds — with low prices.
Here at Bud’s Goods, we’re looking out for our customers. We understand that the current economic climate is tough for lots of people – just look at those gas prices!
We’ve made it our mission to be a trustworthy partner to customers and neighbors through an honest, sustainable and practical cannabis buying experience. We’re committed to building a true New England brand that celebrates local partners while offering the best cannabis selection in Massachusetts. In order to keep our cannabis products affordable and accessible, we offer the People’s 8th AKA Lil’ Bud’s. It’s the cheapest eighth in the state of Massachusetts and we stand by it. It’s simply good honest buds, for $25 bucks. We also offer the People’s 8th in convenient 10 pack pre-roll joints, with our Lil’ Jay’s.
You can rest assured that you’re buying quality cannabis at reasonable prices, because maintaining your health and lifestyle shouldn’t break the bank, so shop with us and inhale the good.