Wholesale marijuana prices in Nevada increased sharply around the July 1 rollout of the states new recreational program, a week in which businesses faced stronger-than-anticipated demand and supply shortages caused by hiccups in the distribution process.
According to figures provided by Cannabis Benchmarks a Connecticut-based provider of wholesale marijuana pricing data the four-week trailing average price per pound of wholesale cannabis increased for the first time in months, suggesting that Nevada marijuana businesses significantly underestimated the demand for recreational cannabis in the state.
As the name implies, the four-week trailing average incorporates four weeks of pricing data to minimize the impact of any outlying data points, so actual wholesale price increases after the start of rec sales were even more dramatic.
For example, the single-week average price for a pound of wholesale marijuana in Nevada rose by $350 from June 30 to July 7 a 15% jump.
Existing medical cannabis cultivators the only producers of recreational marijuana permitted under Nevadas so-called early start program appeared ready to handle the influx of new adult-use customers as they ramped up production ahead of the programs launch. The increased output initially drove down wholesale prices.
However, the launch was complicated by a legal entanglement between the state and an alcohol wholesalers group that, by law, holds the exclusive rights to transport rec marijuana from cultivators to retailers for 18 months.
A last-minute court rulingupheld the alcohol wholesalers exclusivity claim and prevented the state from issuing any recreational cannabis distributor licenses.
The development left medical marijuana growers and retailers licensed to participate in the early start program without a way to legally transport and receive adult-use product. It also caused some to question if early rec sales would even take place without any licensed distributors.
Butan emergency regulationsigned shortly thereafter by Nevadas governor permitted rec retailers to sell product remaining from existing MMJ inventory.
Under the regulation, however, dispensaries couldnt procure additional product for the rec market until the distributor licensing dispute was resolved. So once the adult-use products a dispensary had on hand were gone, no more rec sales could take place.
Despite the setbacks, retailers believed they had enough inventory on hand to last several monthsand therefore could serve the recreational market while the state worked out the distribution issue.
The Cannabis Benchmarks data supports such a line of thinking, as no significant movement in wholesale prices took place throughout Nevadas period of uncertainty.
But from the get-go at 12:01 a.m. July 1 retailers were overrun by customers eagerly awaiting the opportunity to purchase legal recreational marijuana.
While no official sales figures have been released, accounts from several dispensary owners suggest demand was much stronger than originally expected, with some stores even forced to turn away customers.
And wholesale cannabis prices which had been waning for months shot up immediately.
According to Cannabis Benchmarks, the highest price ...