Friday October 13, 2017
As you may know, PotGuide works closely with BDS Analytics to bring you up-to-date insights on marijuana pricing trends. Until now, we have only covered Colorado, Washington and Oregon but we’re excited to announce marijuana pricing information for California is now available! Because California’s cannabis market is still evolving and developing to gear up for recreational sales, we’re expecting to see some pretty interesting results over the next few years. To prepare for California’s recreational cannabis rush, our friends at BDS Analytics have aggregated dispensary point-of-sale information to bring you the latest flower pricing data.
California Flower Pricing Analysis
In March of 2017, BDS Analytics began reporting retail sales trends for California’s cannabis industry. Between March and July of 2017, total sales through dispensary and delivery services across the most populous state in the country reached $1.13 billion. Flower/bud, not including flower going into pre-rolled joints which are tracked separately, contributed 56 percent of cannabis revenues in the state with total sales for the category reaching $629 million.
Despite the reputation for having significant outdoor grows and what would seem to be ample cultivation, Californians pay more for flower than in other states with established recreational cannabis markets. In the five months for which data is available, the average retail price (pre-tax) for a gram of California bud selling through a dispensary was $9.24.
Flower prices slipped modestly between March and May before rebounding in June and July. Compared to March of 2017, average prices in July were just 1.9 percent lower. The 10 best-selling strains in California contributed less than 8 percent of all flower sales. The combined average retail prices for the top 10 selling strains was $8.67 across the five months ending July 2017, six percent lower than the category average.
If the evolution of recreational sales in California unfolds similarly to other states, we can expect a temporary increase in average retail selling prices in 2018 as recreational licensing takes hold, and then prices should decline precipitously. Factors that will come into play include:
- How quickly cultivators are licensed and the ability to grandfather existing cultivators into the initial mix
- The scale of allowed cultivation facilities
- The presence of distributors requiring additional markup of products
What we know from other states is that the faster prices come down, the quicker sales volume will increase. A failure to bring significant cost savings to consumers will allow the black market to continue to thrive.
Check back quarterly for more updates on California's growing cannabis industry!