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Cannabis Campaigners' Guide News Database result:
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US: Washington's Retail Marijuana Prices Fall to Black Market Levels Josh Browning Marijuana Investment News Wednesday 13 Jan 2016 When recreational marijuana was legalized in the state of Washington, one of the biggest concerns was what pricing was going to look like for consumers. The new regulated tax structure would undoubtedly raise the price higher than that of black market value, but would hopefully be low enough to help eradicate the black market. While prices were high at first, the market was soon hit by a glut and the prices sank, leveling off over the next few months. In the last few months, however, the prices of recreational marijuana have again steadily declined across Washington; in some places, they’ve hit street-level prices. The Daily News Online noted that, according to the Washington State Liquor and Cannabis Board, the average statewide price per gram is now under $10.34. When marijuana first became available recreationally, the price was $25 to $30 per gram. In talking to Stephen Reed, co-owner of Trove Cannabis in Bellingham, the consistent price drops are largely due to another excess of supply. A big driving force of this is the large harvest that came from the outdoor crop at the end of 2015. A newer recreational shop in Bellingham, Trove Cannabis opened in November of 2015. Since opening, Reed said that the store has made a point to offer the most competitive prices possible by employing a markup lower than most other shops in the area. Currently, these prices can reach as low as $8 a gram for certain strains. Reed also noted that while they do pay attention to competitor pricing, Trove Cannabis bases its prices off the price of the producer so that the savings pass directly to customers. Because Trove Cannabis opened after the change in Washington’s recreational marijuana tax structure, Reed couldn’t speak to the impact of the state’s switch to a flat 37% tax at the point of sale. Until that switch in July, there was a three-tiered tax structure where each step—producers, distributors and retailers—was taxed 25%. According to Aaron Nelson, the Senior Vice President of Operations for Bellingham’s 2020 Solutions, the tax shift had a negligible impact on price or on the recreational marijuana shop’s business as a whole. Like Trove Cannabis, 2020 Solutions bases its prices on the producer’s pricing and the store was easily able to adapt. Because of the recent radical decline in prices, Nelson pointed out that there are actually some current retail prices that are lower than the wholesale prices of July 2014. Among the changes to the Washington marijuana market in the last few months, there will also be an influx of new competition—more than 200 new state licenses will be added in 2016. This doesn’t necessarily concern Nelson, as he recognized how hard it was to begin, maintain and grow a successful business, marijuana-based or otherwise. He also expects many new shops not to be completely brand new businesses, but extensions or offshoots of existing stores. 2020 Solutions itself has two locations in Bellingham, and both have been doing extremely well since opening in 2014. Nelson attributes this to developing a team and a community, not necessarily a “business.” The idea is to create a welcoming environment, and employees are just as happy to speak to a curious customer and develop a relationship regardless if a sale is made. To help cultivate this natural and welcoming environment, 2020 Solutions actually consulted with Jim Bergquist, who helped turn the Pike Place Fish Market into what it is today, by acting as its facilitator and designer of work culture. Both Trove Cannabis and 2020 Solutions have applied for their medical marijuana endorsements, which should go into effect in July. While all stipulations of these endorsements are still being determined by the state, Reed expects that employees will have to go through a training session and plans on having 1 to 2 employees dedicated specifically to help medical patients. Prices are expected to again level off in the next few months, but it will be interesting to see what happens to the black market and new businesses. After all, if the prices prove sustainable, then the black market might finally be on its way out. http://mjinews.com/washingtons-retail-marijuana-prices-fall-black-market-levels/
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