Any hope for a marijuana gold rush must be tempered by economic realities. Wholesale prices of legal cannabis have fallen dramatically in the early parts of 2017 as the drug is increasingly commoditized.
According to an article in Inc., the price per pound in Colorado has decreased at least 25% since last year. One company reported that the margins per flowers dropped 40% in one year.
In Washington State, the decline is closer to 15%.
This will force entrepreneurs who jumped into the new industry in the past few years to quickly adapt or die out. “Companies need to scale their operations, invest in technology, and build a strong brand that will differentiate their products from competitors,” Brendan Kennedy, CEO of Privateer Holdings, told Inc.
“At the end of the day, cannabis is an agricultural product not that dissimilar from grapes or hops,” he added in the article.
