The question, “How Much Is An Oz Of Weed?”, doesn’t have a straightforward answer. Walk into different cannabis dispensaries across the United States, and you’ll encounter a surprisingly wide range of prices for an ounce of cannabis flower. You might find options priced at $100, others at $200, and even some reaching $300 or more. Just like with many other products, the adage “you get what you pay for” holds some truth, but in the cannabis world, the price is heavily influenced by the specific state market where you’re making your purchase.
While it’s generally observed that cannabis flower prices tend to decrease as state-level cannabis programs become more established, the speed and extent of these price reductions depend on a complex interplay of factors. These include the state’s licensing structure, the legal status of cannabis in neighboring states, and, fundamentally, the dynamics of supply and demand within that particular market.
Nowhere are these pricing dynamics more apparent than when comparing states like Michigan and Illinois. These two states launched their adult-use cannabis markets within a month of each other – Michigan in December 2019 and Illinois in January 2020. However, their price trajectories have diverged dramatically since then.
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In Michigan, the era of $300 ounces is long gone. By 2023, the average retail price for an ounce of adult-use cannabis flower in Michigan had plummeted to approximately $92. In stark contrast, Illinois dispensaries were averaging a hefty $293 per ounce for adult-use flower during the same year. These figures are reported by the Michigan Cannabis Regulatory Agency (CRA) and the Illinois Cannabis Regulation Oversight Office (CROO), respectively, highlighting a significant price gap between these neighboring Midwestern states.
To further illustrate these trends, let’s examine how prices in six different adult-use markets, each with varying levels of maturity, have evolved over the past four years:
| State | 2020 Average Price (per oz) | 2023 Average Price (per oz) | Price Decrease |
|---|---|---|---|
| Michigan | $419 | $92 | 78% |
| Illinois | $452 | $293 | 35% |
| Massachusetts | $394 | $173 | 56% |
| Maine | $449 | $222 | 51% |
| Oregon | $152 | $110 | 28% |
| Colorado | $136 | $98 | 28% |
As the data reveals, Michigan’s cannabis market experienced a dramatic 78% decrease in the average price of an ounce of adult-use cannabis flower, dropping from $419 in 2020 to just $92 in 2023. Illinois, while also seeing a price decrease, experienced a much more modest 35% reduction, from $452 to $293 per ounce during the same period.
Michigan vs. Illinois: A Tale of Two Cannabis Markets
What accounts for such a significant price difference between Michigan and Illinois when considering “how much is an oz of weed”? The answer lies in the contrasting structures of their cannabis retail landscapes and regulatory environments.
One key factor is market competition. Michigan boasts a far more competitive retail environment, with 741 active dispensary licenses as of November 30th. This translates to roughly 7.4 storefronts per 100,000 residents. Illinois, on the other hand, has a significantly more limited market, with only 177 licensed dispensaries as of December 15th, or about 1.4 storefronts per 100,000 people. This limited licensing in Illinois restricts market entry and reduces competition, contributing to higher prices.
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Furthermore, Michigan has a significantly larger cultivation sector, with approximately 950 active cannabis cultivation licenses for the adult-use market, along with an additional 96 licenses for “excess growers,” each permitted to cultivate up to 10,000 plants. This robust supply has led to what many in the industry describe as a “race to the bottom,” characterized by intense price compression throughout 2022 and 2023.
Earlier in 2023, Will Bowden, CEO of Michigan-based Grasshopper Farms, explained to Cannabis Business Times that Michigan’s supply had finally caught up with, and even surpassed, demand, triggering intense pricing wars. Dispensaries, facing oversupply, began lowering prices to compete and maintain shelf space, sometimes even at a loss, hoping to recoup profits later. However, as Bowden pointed out, “When you lower your price, you’ve actually just set your new price,” making it challenging to raise prices again in a saturated market.
From a demand perspective, Michigan’s adult-use dispensaries are projected to sell around 950,000 pounds of adult-use flower in 2023, a staggering 2,175% increase from the 41,750 pounds sold in 2020, according to the CRA. While not a direct comparison, Illinois’ adult-use dispensaries are on track to sell 41.7 million products in 2023, a 188% increase from the 14.5 million products sold in 2020, as reported by the CROO. While both states show significant market growth, Michigan’s supply and competitive landscape have driven prices down much more aggressively.
Broader Price Dips Across Mature Markets
The trend of decreasing cannabis flower prices isn’t limited to Michigan. Looking at other mature adult-use markets, we see similar price declines when considering “how much is an oz of weed” over time.
Massachusetts, for example, saw a 56% decrease in its average adult-use flower price, from $394 per ounce in 2020 to $173 in 2023. Maine experienced a 51% drop, from $449 to $222 per ounce. Even in more established markets like Oregon and Colorado, where prices were already relatively lower, we observed further decreases. Oregon’s average price decreased by 28% ($152 to $110), and Colorado’s also fell by 28% ($136 to $98) during the same period.
The smaller price decreases in Colorado and Oregon, compared to newer markets, can be attributed to their market maturity. These states were early adopters of adult-use cannabis legalization, with sales launching in January 2014 and October 2015, respectively. Colorado, for instance, experienced a more dramatic 52% price decrease in its average adult-use flower price between its first year of sales in 2014 ($344 per ounce) and its fourth year in 2017 ($165 per ounce), according to the state’s Marijuana Enforcement Division. This rate of decrease is more consistent with what newer markets are currently experiencing in their early years.
What’s Next for Weed Prices?
The question remains: will cannabis prices continue to fall, and how low can they go when considering “how much is an oz of weed” in the future?
Like many aspects of the evolving cannabis industry, the answer is uncertain and depends on several key factors. Legislative and regulatory changes, such as the potential passage of the SAFE Banking Act in Congress, which would provide cannabis businesses with access to traditional banking services, could influence market stability and potentially impact pricing. Similarly, the DEA’s decision on the U.S. Department of Health and Human Services’ recommendation to reschedule cannabis could have significant ramifications for the industry, although the precise effects on prices are hard to predict. Broader economic conditions also play a role, as consumer spending and overall market stability can affect demand and pricing.
Interestingly, during the favorable market conditions at the peak of the COVID-19 pandemic, Oregon’s average adult-use retail price for cannabis flower actually increased, reaching $161 per ounce in August 2020, after falling as low as $118 per ounce in mid-2019. This demonstrates that prices can fluctuate based on unforeseen market shifts.
However, under the current market conditions following the post-pandemic correction, prices in more mature markets appear to have reached a floor, at least for the time being. Oregon’s all-time low price for an ounce of adult-use cannabis flower was $105 in April 2023, and Colorado’s reached its all-time low of $92 in April 2023 as well. Michigan’s all-time low of $80 per ounce occurred in January 2023. Meanwhile, all-time low prices in Maine ($213), Illinois ($268), and Massachusetts ($159) were recorded just last month, in November 2023, suggesting that price compression is still ongoing in some markets, while others may be stabilizing.
Ultimately, determining precisely “how much is an oz of weed” will continue to be a dynamic question, varying significantly based on location, market conditions, and the ever-evolving landscape of the cannabis industry.
