$50 Ounces: At What Cost?
Editor’s Note:
We had been kicking around the idea of what the $50 ounce actually means for the state market and when I say “we” I really mean publisher Greg James and editor-in-chief Garret Rudolph. But the stark reality of the bottom-rung cannabis deal was that there was clearly a significant portion of Washington’s market that did not care about fancy packaging, THC percentages or marketing campaigns, they want the most they can get for the least they can pay. At the time of writing this story, I didn’t realize it, but this was the early warnings of the death of mid-tier brands.
Walking into Diego Pellicer in Seattle is like entering the lobby of a high-end hotel: just past the perfectly manicured hedges and Victorian iron gates, shoppers are welcomed by crystal chandeliers, exquisite tile work, Roman-style columns and friendly staff.
Inside the cannabis shop’s back-lit glass and brushed-steel display cases is a curated selection of hand-crafted edibles, artisan flower, top-shelf concentrates and exceptional blown-glass accessories.
And full ounces of cannabis for $50.
Diego Pellicer is far from the cheapest place in town. But the bargain-priced Mylar bags of Chemdawg sitting across from the prestigious $336 Gold Leaf cannabis cigars provides an apt metaphor for what has happened in the Washington and Oregon retail markets: State-licensed marijuana retailers have been locked in a price war as oversupply and intense competition have essentially created a binary market in which cannabis is either top-shelf or budget. Consumers seemingly want either the best or the cheapest.
Phone calls to dozens of Seattle and Portland shops showed about one-third carry an ounce of bud at $50 or cheaper. In Seattle, the average price of budget cannabis was $82, with a range of $35 on the low end up to $140.
While budget-conscious consumers enjoy the ultra-low prices, many in the industry worry the price at retail is not sustainable. Some fear the “race to the bottom” will reward bad business practices and lead to product diversion, black market sales and more businesses closing over the coming years.
“Businesses can only bear so much weight for the value without breaking the system,” says Green2Go co-owner Steve Lee, whose cheapest ounce is roughly $90. “When we start getting into these super-bargain basement prices, at what cost is the question.”