Last year at Seattle Hempfest, the wise NJ Weedman gave festival goers a word of advice: “It’s just cheaper to buy a pound of weed.”
While buying a pound of cannabis is illegal for individual consumers in every state, this statement may now also be untrue in Colorado. One week prior to recreational legalization, a pound wholesale was worth around $2,137.50 on average. Since January 1st, prices have surged, causing the average strain price to be valued up to $2,733 per pound, a near 30% increase over the course of a week.
Why has this happened, exactly? Well, remember when we told you that there may be cannabis shortages in Colorado? Turns out recreational dispensaries turned to buying wholesale cannabis as a way to make up for the high demand of new consumers.
All Colorado dispensaries are required to grow 70% of the cannabis that they sell, but it was impossible to grow exclusively for the recreational market before the official date of legalization. Instead, dispensaries were allowed a one-time-only transfer from their medical crops to the new legal market.
Without the ability to amp up growing for the massive influx of new customers expected by dispensaries, many businesses beefed up their medical supply by purchasing wholesale cannabis.
They turned to Roberto’s List.
Roberto’s List is the brainchild of Boulder’s own Roberto Lopesino, former avalanche safety instructor gone cannabusiness entrepreneur. The List is a one-of-kind database system that connects dispensaries short on marijuana with ones that have extra inventory, keeping track of prices and strain trends over time.
The idea for the List came after Roberto began a new career in the early 2000s working in a medical marijuana dispensary. At the time, there was no in-house grow quota for dispensaries. This meant a loose network of caregivers provided the majority of available inventory to other dispensaries and centers. When the laws changed in 2010, the wholesale market shifted drastically. Rather than purchasing cannabis from another local shop, dispensaries themselves were responsible for the type and quality of cannabis grown.
With everyone growing their own product, what were dispensaries supposed to do with the excess? What were they supposed to do when they ran out? The List, the first ever commodity trading floor for wholesale cannabis, was the answer.
“Almost all of the big recreational dispensaries are selling products that aren’t their own,” Roberto told me. “Because of the onetime transfer from medical to recreational, people were buying up huge amounts of wholesale medical cannabis hours before New Year’s Day.”
All this wholesale buying caused Colorado prices to skyrocket, with dispensary owners facing up to a $4,000 per pound asking price for wholesale; the highest in history. In order to meet the sheer demand for their cannabis products, retail shops bought whatever wholesale cannabis they could get their hands on, some regardless of type or quality.
“People tend to spend a disproportionate amount of their income on cannabis,” Roberto explained. “They’re going to wait in line an extra 10 minutes and will spend an extra $10 to buy this legally. Right now there’s a 35 to 1 demand for recreational cannabis. This huge demand means that people aren’t going to be picky about quality or strains, they’re just going to buy what they can get.”
Originally, the List aimed to connect dispensaries with similar growing philosophies, allowing shop owners to pick cannabis that was most similar to their own. This changed with the mad rush to meet the demands of new legal marijuana consumers.
“There is an inherent deficiency in the supply chain,” said Roberto. Too few shops are open, and even with the one-time transfer from medical to recreational, dispensaries haven’t been able to grow enough of their own plant to meet 70% of consumer demand.
Dispensaries’ struggle to keep up with new clientele has irked some medical consumers. “I was so disappointed,” one Leafly fan wrote in reference to her experience with a recently converted medical/recreational dispensary. “They had a ridiculous set up. No inventory. Sorry, but I just can’t go back.”
According to Roberto, “It’s going to be a while before recreational reaches the level of connoisseurship medical cannabis has earned.” Until new shops expand their grows, more access points become available, and new recreational consumers begin to get picky about their cannabis, buyers may just have to put up with higher prices and quality that’s just a little bit unpredictable.
Photo credit: melloveschallah via photopin cc