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Oversaturation & $20 Eighths  

Ravon Williams

Happy New Year! As we start the year, it’s only natural to reflect on the past as we look into the future. Let’s get into it.

Reflecting

We saw some major shifts in the cannabis industry last year. A handful of establishments shut down throughout the state. On top of that, we saw mass layoffs resulting in over 200 more workers without a job. 

We also saw pricing hit new lows last year, and not just for flower. Pretty much every category of consumable cannabis took a huge hit on pricing. A lot of people in the industry say that the current pricing is a “race to the bottom” and as annoying of a statement as it is, it reigns correct. 

Looking Forward

How can we stop layoffs and closings? Some are hoping that the cannabis commission steps in and changes some laws to help struggling businesses. Specifically changing the cap of three establishments to six (or more) so that larger operators can buy the little guys out, saving struggling businesses from bankruptcy while making the big guys, well, bigger. Whether it happens or not, at some point the commission or someone is going to have to step in and make some changes. 

For consumers, most probably want to see the prices stay low. But those low prices are part of what’s driving some operators out of business. They can’t stay afloat in a market where they’re barely making money. 

Now that $20 eighths have become a norm in some markets, I see it as almost impossible to bounce back. Leading me to think we’re going to see a lot more of what we saw last year, prices racing to the bottom and operators closing down because they can’t keep up with the market. 

The weirdest part is that this low pricing isn’t everywhere. Some establishments in the state still don’t carry eighths for less than $35, it’s really all geographical. But in a city like Worcester that’s practically overflowing with dispensaries, price wars thrive.

Reasons For Low Prices

I remember getting into the industry a few years ago where eighths (regular eighths, not small buds or pre-ground flower) were never lower than $48 pre-tax, and the usual price of an eighth ranged from $50-$65. Those were wild days, but not wilder than $20 eighths.

There’s a lot of variables to consider when we look at the shift in the market, a prominent one being oversaturation. Massachusetts has more than 300 dispensaries and over 100 cultivation and production facilities. There is an abundance of products on the market and it creates a war for business to business commerce. Companies find themselves having to constantly compete and undercut each other on pricing to make their business “prosper”. This is how prices are able to get so low. 

Another consideration is the general inflation. With the cost of a dozen eggs being sky high these days, customers have to shop more intentionally on non-necessities like weed. Customers shopping on a tight budget typically prefer to grab two $20 eighths over a singular $40 eighth. Even customers not on a tight budget prefer it. It’s simple math, why buy one when you could get two for the price of one? 

What Does This Mean For Consumers?

There isn’t much the average person can do to prevent the collapse of a business. But for those who like affordable products, do some research on the dispensaries in your area to find the best pricing. Even if you’re not into flower, prices are low for just about everything and dispensaries all over are competing to get your business. I suggest you find a solid 2-3 shops with good prices and products that cater to you and take advantage of the pricing war!

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