Data released by the Ohio Division of Cannabis Control shows that the price of marijuana has slowly been reducing since adult-use sales were launched this past summer. Dispensaries have reported slow-starts to the recreational program, indicating that vendor costs, confusion among consumers, and the state’s regulations may have contributed to this.
Under state law, licensed dispensaries aren’t allowed to sell marijuana cultivated or purchased outside the state. This has led to a decrease in vendor prices. State records also show that when adult-use sales were launched in August, the manufactured sales average for marijuana product was $31.06 while the average cost of one-tenth ounce of flower was $26.59.
As of last week, the manufactured sales average was $28.70 while the average cost of one-tenth ounce of flower was $21.72.
Terrasana’s director of marketing Nikki Stanley revealed that while they were seeing more traffic after recreational use of marijuana was launched, it still didn’t meet the expectations. Prior to the state approving Issue 2 which allowed individuals aged 21 and above to legally cultivate and use cannabis, most Ohioans were travelling to Michigan to get their marijuana fix.
Even after the recreational-use law going into effect, it appears residents in Ohio are still travelling to Michigan for marijuana. Data from Headset shows that in the last 2 years, Michigan’s marijuana market has recorded over $263 million in total sales.
With regard to sales, $178.5 million in total product sales had been recorded in Ohio as of last week.
Stanley has revealed though that dispensary marijuana prices have also been affected by potency, with higher THC content pushing prices higher. This has made products with higher potency very popular among consumers and while there’s a lot that makes a product good, new consumers seem hell bent on getting products with the highest THC.
The state’s recreational use program imposes a 10% excise tax on all adult-use purchases, with towns that have dispensaries operating in their jurisdictions receiving 36% of the funds generated.
The state has also allocated some taxes towards a substance abuse and addiction fund and a social equity fund, among others.
In addition to this, the program applies a sales tax to cannabis purchases. While the base tax rate is about 5.2% in the state, counties are allowed to impose additional sales taxes on purchases. In Green County, the total tax rate as of this year is 6.75% while in Montgomery County, it’s 7.5%.
The trend being witnessed in Ohio mirrors to a large degree what other jurisdictions in which leading firms like Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) operate saw as the markets in which they are licensed had just launched.
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