In California, the price that wholesale marijuana is being sold has plummeted, with outdoor farmers selling for 60% less since earlier this summer, according to MJBizDaily.
Indoor farmers are fairing better, with prices down just 10-20%, but still on a downward trend.
The correlation is rather simple on this one, with the quantity of marijuana being produced rising to a level that is imbalanced with demand.
“Probably a conservative estimate is we’re producing about twice what the domestic market can consume, and that’s with current permitting levels,” Ross Gordon, policy director for the Humboldt County Growers Alliance, tells MJBizDaily.
One of the reasons for the discrepancy between outdoor and indoor is that the appetite for higher-tier quality cannabis is still on the rise, which is typically grown indoors.
“For commercial grows, non-AAA, you’re probably at a 40% price compression. Outdoor is 50%-60% price compression, and premium indoor is only 10-20% price compression,” says Scott Raquiza, a cultivation consultant.
California has no cap on cultivation permits, so the number of sites keeps growing every year. It seems we’re in the midst of a correction, at least in this state.
The most unfortunate prediction from some farmers is that this trend won’t pick back up any time soon, with some forecasts lasting months, and some over a year. Summer typically comes with a boost in price per pound, but this year that increase didn’t materialize.
Read the original at MJBizDaily.
