The Impact Of Inflation On Cannabis Sales
What You Can Do About Rising Costs
Inflation affects every industry, including cannabis. However, the impact on the weed industry has surprisingly been mixed in nature because the market is significantly different compared to other consumer-driven industries.
For example, the prices of weed have seen a big drop over the past few years, even when we were right smack in the middle of a high inflation period. To drive home a point, from January 2021 to April 2022, wholesale prices of weed flower saw a 46% reduction, while extraction-grade cannabis buds dropped by 55%. Meanwhile, Oregon and Michigan’s cannabis markets saw a drop in prices due to a glut in supply, as well as increased competition among dispensaries.
However, things are looking a bit more glum lately: according to a recent poll, 2 out of 3 cannabis consumers said they now spend less cash on cannabis due to inflation. The poll, which was exclusively shared with Marijuana Moment, was conducted by NuggMD, a marijuana telehealth platform. It involved interviews with 518 cannabis consumers, which took place from February 27 to March 2.
They asked cannabis consumers about their recent spending habits when it came to cannabis, and some 66% of them admitted to putting less cash out now due to higher costs. There was also 34% of consumers who said that despite inflation, they have made no changes to their spending on marijuana. When it comes to the decrease in spending, it isn’t clear if it’s because of the higher prices, or if it’s because of the state of the economy, or a mix of both factors.
“Our poll establishes that inflation is hitting the cannabis consumers hard, which should come as no surprise,” explains Andrew Graham, NuggMD’s head of communications. “Recent polling from Pew shows the share of US adults who have concerns about healthcare affordability has increased by 10 percentage points compared to last year. And, last June, medical inflation began growing faster than overall inflation for the first time since 2021,” he said.
It’s easy to point to rising cannabis costs as a major factor that makes it more difficult for consumers to access essential goods, such as medical marijuana. To add salt to injury, cannabis is still a Schedule 1 substance at the federal level, which means that it can’t be included in insurance coverage. Patients have to pay with their own cash, adding to a seemingly never-ending growth of medical bills.
“Across the board, rising costs are clearly making it harder for Americans to access the health and wellness care they need,” Graham said.
He suggests that IRS Code 280E should be ended by Congress, which will mean that cannabis businesses must pay up to 80% tax rate. “If lawmakers continue to punt on 280E, then the policy fix could involve shifting the cost burden away from the consumer by mandating insurance policies cover cannabis used to treat qualifying conditions under state-legal programs, adds Graham. The tax savings could then be funneled towards building new dispensaries in areas that lack access, which can also reduce costs associated with travel. Other significant benefits include better wages for dispensary staff, and profits can be reinvested into research and development.
What Medical Marijuana Patients Can Do
While it might feel like there’s no other choice but to tighten one’s belt, it’s possible to get creative with your cannabis supply and stretch your budget, despite the rising prices these days. Here are some things that cannabis consumers an medical marijuana patients can do:
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Buy in bulk: Purchasing cannabis flower in bulk is one of the most efficient ways to reduce the cost per gram. Licensed dispensaries offer great deals and discounts for buying in bulk, which can help stretch your cash.
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Buy smaller, budget brands: If you consume other types of cannabis products such as vapes, edibles, oils, and drinks, opt for brands that are less expensive. As long as you are buying from a licensed dispensary, you can have peace of mind that you’re buying quality products that don’t compromise quality.
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Experiment with methods that offer bang-for-buck when it comes to your hit: Some cannabis consumption techniques are more cost-effective compared to smoking. If you’re only used to smoking weed, periods of high inflation are a good time to experiment with methods that are novel for you. For example, edible cannabis products can last up to 4 to 8 hours long, while microdosing enables you to experience the therapeutic benefits of cannabinoids more frequently but in much smaller doses.
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Learn how to grow your own weed: If you’re able, live in a state that allows home cultivation, and have the budget as well as space, growing your own weed is a fantastic way to become self-sufficient. Despite the initial expenses related to setup costs, home growers can save as much as 75% on flower costs in the long run.
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Keep an eye out for the potency ratio: When shopping at a dispensary, look for products that offer great value when it comes to potency per dollar.
Employing these strategies can help cannabis consumers and patients alike save some money when prices are skyrocketing.
Conclusion
Despite the rising prices and economic challenges of the current times, we can look towards the silver linings – opportunities that exist in the current cannabis landscape. It’s now easier than ever for consumers to find quality products that don’t have to cost an arm an a leg, while big companies are well-positioned to grow their market share. We can also hope that federal rescheduling is in our near future, and hope that the POTUS may have a change of heart somewhere along the way.
IS CANNABIS INFLATION PROOF, READ ON...
