The Latest Why Medical Marijuana Prices Are Soaring

Ohio medical marijuana patients are still unhappy with prices, though Michigan’s cannabis market may influence their expectations and motives. As Michigan moves forward with its retail cannabis market, Ohio medical marijuana patients are still unhappy with prices. CBD and THC products are expensive in Ohio, even though the state has some of the lowest taxes on medical marijuana in the country.

The average price per ounce of usable cannabis in Michigan is $211, while it’s $485 per ounce in Ohio – more than double! Even considering Ohio’s lower tax rate, this price difference is significant.

As Michigan moves forward with its retail cannabis market, Ohio medical marijuana patients are still unhappy with prices.

Though medical marijuana has been legal in Ohio for over a year, patients are still unhappy with the prices of cannabis products.

Even with recent changes to state law that allow for higher potency products and expanded qualifying conditions, patients say they struggle to find affordable medicine.

One primary reason is that, unlike Michigan, Ohio does not allow retail sales of marijuana. This means that all cannabis must be grown and sold by licensed dispensaries, which raises costs significantly.

CBD and THC products are expensive in Ohio,

As medical marijuana patients in Ohio continue to voice their displeasure with the high cost of CBD and THC products, it’s worth looking at how Michigan’s burgeoning cannabis market might influence their expectations.

After all, the average price per ounce of usable cannabis in Michigan is a whopping $211 – more than double what it is in Ohio! So what accounts for the high prices in Ohio?

While many factors have influenced cannabis prices in Michigan, including the length of time since the state passed its medical marijuana law, the size of the market, the state’s infrastructure, and taxes, the most critical factor is price competition.

Indeed, no matter how you break down cannabis prices in Michigan, they are significantly lower than what’s currently being charged in Ohio.

This is where it gets interesting. The national average is $326.06 an ounce. The price of the marijuana flower has been on a downward slide in most states, with the $241.74 average cost per ounce in Colorado, for example, falling from $206 to $150.

So, what about Ohio? The average price of $241.74 of cannabis flower has increased since the state’s medical marijuana program first went into effect, going from $279 an ounce to $330 an ounce. That is quite an increase!

Michigan’s marijuana prices have been shockingly high (for now…), but they’re likely to drop as competition in the recreational and medical markets heats up. And, as the cost of cannabis falls, licensed medical marijuana processors in Ohio may also be compelled to lower their prices for CBD and THC products.

In the meantime, here are three arguments for why cannabis prices in Ohio are high compared to other states – and why this is likely to change. In Michigan, it seems there are two main factors responsible for the higher price of cannabis products:

One is that a much more comprehensive range of products is available. In Ohio (and many other states), only raw cannabis flowers, oils, and tinctures are available. However, additional products, including oils, edibles, tinctures, lotions, body balms, and other topicals, can be purchased in Michigan.

Let’s take a look at Ohio’s medical marijuana program. Ohio’s Prohibition on Medical Cannabis Cultivation and Retail Sales Prevents Supply from Keeping Pace with Demand (PDF link).

However, the high demand for cannabis in Michigan is not the only factor that has driven the price of medical marijuana. Another major factor is that Michigan does not allow for the retail sale of cannabis – a situation that seems likely to endure.

This lack of retail sales has meant that all transactions must be conducted directly between patients and their caregivers, precluding entrepreneurs from entering the market and opening up retail outlets.

This situation has placed a burden on caregivers – who are often not professionally trained in cannabis cultivation – to take on the production and sale of medical marijuana. The absence of retail outlets also prevents patients from shopping around for the best prices, which could result in price gouging and drive patients to seek out cannabis in the black market.

This means that the supply of medical marijuana in Michigan must be grown in the state, which inevitably drives up the price. Even if Michigan allowed for retail sales, prohibition on production in the state would still increase costs to some extent since it would require the purchase of marijuana from states where it is legal to produce and sell. In addition, fixed costs are associated with launching a business in any industry.

Last year, the state legislature passed a bill (signing bonus: $7,650) to regulate medical marijuana dispensaries. However, this legislation was later struck down by a state court ( PDF link ) as unconstitutional because it contravened the Michigan Medical Marihuana Act. This decision left an opening for the state legislature to pass new legislation which modified the law.

In October 2016, the state supreme court ruled that “nothing in the [medical marijuana] act permits a person to engage in commercial activity involving marijuana, or otherwise to sell or distribute marijuana.”

People v Sherman, __ N.W.2d __ (Mich. 2016). (The ruling in Sherman was not a shock, as Michigan had already clarified that its medical marijuana law does not allow for sales of cannabis by dispensaries as early as 2011.

Until a functioning system of medical cannabis dispensaries is in place, the price of medical cannabis will continue to be high.

Conclusion,

Marijuana is generally used in the United States. According to federal government estimates, 22.2 million Americans have used it in the past month and many start using it in their adolescent years.

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