Every industry that experiences too much regulation will be hindered because the increased regulations translate to increased prices. The cannabis industry is not immune to this economic principle. Sure, the cannabis industry needs to be regulated to a certain extent to keep the industry above reproach. However, prices need to be low enough so the regulated system can compete with the unregulated, illicit market. This is even more important when the market is only a medical market and the consumers are patients battling severe and debilitating medical conditions. Minnesota’s medical cannabis regulations are likely to lead to prices so high that many patients will be unable to afford medicine, not to mention unnecessarily limit the size of the industry. Per Marijuana Business Daily:
One of the licensed companies, Minnesota Medical Solutions (MinnMed), said a patient can expect to pay between $100 and $500 a month for its products, while the other, Leafline, will likely offer a month’s supply of cannabis-based medicine for between $250 and $500, according to the AP.
The high pricetags are a direct result of state regulations that prohibit smokeable marijuana and require cannabis to be converted into pills, oils or vapors. Also adding to the cost are tight security requirements, along with transportation costs from production facilities to dispensaries.
States that allow cannabis industry operations need to balance regulations with consumer sticker shock. This goes for medical cannabis regulations as well as adult, social-use cannabis regulations. A good example is Washington and Oregon. Washington has a lot of regulations in place, which has led to prices of upwards of $30 per gram. Compare that to what regulations being proposed in Oregon, which will be far less than what Washington businesses are experiencing, which should result in much lower prices, bringing more people into the licensed and regulated market. Lower prices will lead to more consumers being able to make purchases, which will lead to a larger industry, which will ultimately benefit states in the form of more tax revenue and low-income patients who can’t afford exorbitant prices. States will eventually recognize the economic realities of cannabis, but hopefully too many patients won’t be priced out before more reasonable regulations are implemented.
Anthony Johnson
Anthony, a longtime cannabis law reform advocate, was Chief Petitioner and co-author of Measure 91, Oregon's cannabis legalization effort. He served as director of both the New Approach Oregon and Vote Yes on 91 PACs, the political action committees responsible for the state's legalization campaign. As director of New Approach Oregon, Anthony continues to work towards effectively implementing the cannabis legalization system while protecting small business owners and the rights of patients. He sits on the Oregon Marijuana Rules Advisory Committee and fights for sensible rules at the legislature as well as city councils and county commissions across the state. Anthony helps cannabis business comply with Oregon's laws and advises advocates across the country. He also serves as content director of both the International Cannabis Business Conference and the Oregon Marijuana Business Conference, helping share the vision of moving the cannabis industry forward in a way that maintains the focus on keeping people out of prison and protecting patients. He was a member of the Oregon Health Authority Rules Advisory Committee, assisting the drafting of the administrative rules governing Oregon’s state-licensed medical marijuana facilities. He first co-authored and helped pass successful marijuana law reform measures while a law student at the University of Missouri-Columbia School of Law. He passed the Oregon Bar in 2005 and practiced criminal defense for two years before transitioning to working full-time in the political advocacy realm. His blogs on Marijuana Politics are personal in nature and don't speak for or reflect the opinions of any group or organization.
