Missouri weed prices are about to go up. How high? That depends whom you ask
In February, the first month that recreational marijuana could legally be sold in Missouri, sales hit $103 million — well above what many industry observers predicted.
That’s good news for the marijuana business. For consumers, it could be more of a mixed bag, at least in the short term.
Here’s why: The state’s licensed cultivators didn’t anticipate such huge weed sales, either. They weren’t operating at full capacity and didn’t grow enough to keep up with all that new demand. Many are ramping up production now, but it takes about four months to grow, dry and cure marijuana. Which means that until those new plants are ready, supply will stay low while demand is high.
Which usually means prices go up. How high depends on whom you ask.
Mike Wilson of Franklin’s Stash House, a manufacturer of cannabis tinctures and beverages, said he expects consumers to see a 50-60% price increase over the next several months in certain categories. The cultivators that provide Wilson with the marijuana he uses in his products have upped their prices, which means Wilson has to charge dispensaries more. He expects those dispensaries to pass along that price increase to consumers.
“Our inputs have increased 300% in the last few weeks,” said Wilson. “We’re eating about three-quarters of that cost that was added to us. But the lemonade we have that sells in dispensaries for $10 will likely go up to about $15, and the pre-roll blunt pack we sell that was $35 or $40 could go to $60 or $65.”
“Prices are going to get volatile in the next few weeks,” Wilson added. “I think until June you’re going to see less product available and increased prices.”
But other industry operators aren’t as spooked. Blair Cave of Besame Wellness, a local chain of dispensaries, said he’s noticed some increases in the price of THC distillate, which is used in vape cartridges and other products. Flower is also hard to come by lately — Cave said Besame used to purchase flower from “10 or 15 cultivators” but is currently down to two or three.
“But I don’t think most of the things we’re seeing will affect the end user very much,” Cave said. “Mostly it will hit dispensaries on the margins.”
John Mueller, CEO of Greenlight, another local dispensary chain, said a few of his vendors have raised prices in recent months but thinks Wilson’s prediction of a 50-60% price hike is unlikely.
“You’re seeing higher prices in concentrates and edibles and drinks, because it’s tougher to get distillate now than it has been in the past,” Mueller said. “But I don’t think consumers will see anything more than a temporary 5 or 10% increase.”
“Ten percent, tops,” agreed Josh Mitchem, who owns Clovr, the biggest manufacturer in the state.
Only 50 of the state’s 67 cultivation facilities are currently operational, said Jack Cardetti, spokesman for the Missouri Cannabis Trade Association, and of those, many aren’t producing to their maximum capacity. That’s due in part to an oversupply in the market last year, when the state’s medical marijuana program produced 92,000 more pounds of marijuana than it sold.
Cultivators responded by turning off some of their grow rooms and trimming staff. After voters approved recreational marijuana in November, many cultivators began to expand their facilities or increase production in anticipation of a much more vibrant market. But due to a variety of issues — a tight labor market, a tougher lending environment — that process hasn’t kept up with demand. “We estimate we’re only at 40% of cultivation capacity right now,” Cardetti said.
“It’s not like turning on a light switch,” Mitchem said. “But this is a temporary problem. As growers turn more rooms on, this problem fixes itself sometime in April or May.”
So far, the numbers don’t suggest much in the way of price increases for consumers. According to Pistil Data, a cannabis industry tracker, Missouri marijuana prices have remained mostly steady over the last three months. The average price of gummies has increased by about $5 in that time, but the average price of an eighth of flower or 0.5g vape cartridge has risen only by about a dollar.
Missouri’s prices also compare favorably to Illinois, the only bordering state where recreational weed is legal. There, taxes on marijuana purchases can climb as high as 35% depending on THC potency, whereas Missouri’s tax is a flat 6%. Cardetti and others suggested that Missouri’s $103 million opening month was in part due to Illinois residents crossing the Mississippi in search of lower prices.
Mueller thinks that trend will continue — and grow. “I think the state will see $120 million in March,” he said. “I think Missouri is going to be the fastest state to hit that kind of number this quickly.”