How much does legal pot cost?

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Behind the counter at Hollywood High Grade, a Los Angeles medical marijuana dispensary, manager Veronica Van Sant is showing a visitor the good stuff, some of the highest quality strains of cannabis sold here. Carefully tended and grown outdoors in Northern California, this artisanal pot sells for about $280 an ounce.

But there are more affordable options here among all of the marijuana products, like joints that sell for $7 each or two for $10. The most expensive joins go for $12.

“But honestly most people like the cheaper better,” says Van Sant.

Veronica Van Sant, manager of Hollywood High Grade  Photo: Saul Gonzalez  (The original image is no longer available, please contact KCRW if you need access to the original image.)
Photo: Saul Gonzalez (The original image is no longer available, please contact KCRW if you need access to the original image.)

Many customers at this dispensary, one of the oldest in the city, wonder how much they’ll pay for their cannabis now that recreational marijuana sales are legal in California. One of them is Vanessa, who doesn’t want her last name used. She is in her 50s and uses marijuana to treat chronic pain.

I usually smoke at night to help me sleep if I’m having a hard time sleeping nor if I have back pain,” Vanessa says.
“It usually helps me out.”

Vanessa is on a fixed income and spends about $50 a week for cannabis. She says if prices do go up, she won’t be able to pay much more.

“What the prices are now is about as high as I can go,” she says.

Those who study the cannabis industry say the price of marijuana, like other drugs, is largely inflated in places where it’s illegal. The risk of selling it adds to the cost, says Beau Kilmer who directs the Rand Corporation’s Drug Policy Research Center.

Photo: Saul Gonzalez (The original image is no longer available, please contact KCRW if you need access to the original image.)

“Right now when someone is purchasing, especially outside of California, marijuana, cocaine and heroin, a lot of what you are doing are compensating the drug dealers and everyone else along the supply chain for the risk of arrest and risk of incarceration,” says Kilmer. “With legalization that goes away.”

Legal sales will also lead to industrial scale cannabis production in California. With that increased supply, Kilmer says marijuana prices should inevitably fall for consumers in the long run, especially after an initial price spike.

He points to the experiences of other states that have legalized marijuana, like Washington.

“In May of 2015, the average price paid per gram was roughly about $12,” says Kilmer. “Fast forward two years,  the average price for that same product in May of 2017 was closer to seven dollars and 25 cents. And you’ve continued to see the price decline over time. And that’s what you’re going to see in California too.”

Much life coffee, Kilmer says different marijuana consumer markets will emerge. Some people will want to buy Dunkin’ Donuts priced cannabis, while others will shell out more for connoisseur strains that are more akin to high-end Blue Bottle coffees.

But there are worries about how much government will add to the cost of legalized recreational marijuana in California through a variety of state and local taxes and fees.

At Hollywood High Grade, manager Veronica Van Sant says she’s tried to cushion any potential sticker to customers because of new taxes.

“There’s going to be a 15 percent tax added on top of the 10 percent city state sales tax that we already pay, ” says Van Sant. “So we dropped all of our prices about three months ago 15 percent to try to accommodate for that tax so people aren’t overspending.”

But whatever happens to cannabis prices, marijuana retailers expect to see business boom in the months ahead. Hollywood High Grade plans to remodel and add more employees to deal with the expected increase in foot traffic.

As for products she thinks will sell, Van Sant expects marijuana vapes to be especially popular with new customers.