Inflation? Not in the cannabis market. Here's why weed is so cheap.
Everything seems to cost more these days – except one fragrant, nebulously legal recreational product.
The price for an ounce of cannabis in Massachusetts plunged from $394 in 2020 to $145 in 2024, according to an analysis by the trade publication Cannabis Business Times. An ounce of weed in Michigan cost $84 in 2024, down from $419 in 2020. Maine prices dropped from $449 to $206.
Weed prices are tumbling at a time when shoppers expect to pay more for nearly everything else. Consumer prices are 24% higher, on average, than at the start of 2020, Bankrate reports.
“I’d call it a collapse,” said Ross Gordon, a policy analyst at Origins Council, a group that represents small cannabis farmers in California.
In California, wholesale cannabis once cost more than $1,000 a pound, Gordon said. “And now we’re down to maybe $250 a pound, which is below the cost of production for, certainly, the majority of small farmers.”
Not long ago, recreational cannabis dispensaries were free to charge pretty much what they wanted. Dispensaries were few. Supply was limited. With sales done mostly in cash, many weed retailers were almost literally rolling in dough.
Over the past few years, however, America’s weed economy has imploded. The market is flooded with duplicative dispensaries and excess weed. Supply far exceeds demand.
For cannabis merchants, “you can’t cover your costs with the price, because the price has collapsed so much,” said Beau Whitney, a cannabis economist in Portland, Oregon. “But it’s great for consumers, because consumers get cheap weed.”
Whitney estimates that 27% cannabis operations are profitable in 2025, counting retailers, distributors and growers. Some operators are breaking even. And roughly one-third of the cannabis market “is just losing money,” he said. “Losing their house.”
Michigan's dubious honor: The cheapest weed
Michigan may now have the cheapest legal weed in the nation, to the chagrin of growers and sellers, and to the probable delight of buyers.
An eighth of an ounce of recreational cannabis, a standard unit of sale, used to cost $60 or $70 at Michigan dispensaries. Now, the price is “in the ten-dollar range,” said Joe Neller, a Michigan cannabis lobbyist.
Recreational cannabis sales began in 2019 in Michigan. At the time, an ounce of cannabis in a Michigan dispensary cost more than $200, Neller said, mirroring the street price for illegal weed at the time.
Today, an ounce will cost you about $60.
Prices crashed for several reasons. One is the vastly diminished risk in growing, shipping or selling marijuana. Simply put, growers and sellers on the legal market no longer risk prison time.
More recently, though, the main problem is oversupply. Cannabis growers and sellers have poured into the market in Michigan, Massachusetts and other newly legal weed states.
“We have retailers that are competing with each other literally on the same street,” Neller said.
In Massachusetts, 'a fight to the bottom' on cannabis
In Massachusetts, “you can look at a city like Northampton that has many dispensaries on the same block and across the street from each other,” said Ryan Dominguez, executive director of the Massachusetts Cannabis Coalition.
As a result, “there’s just been this kind of fight to the bottom, in terms of price,” he said.
A few years ago, a pre-rolled joint retailed for $14 to $16 at a Massachusetts dispensary, Dominguez said. Today, the average price ranges from $6 to $8.
Roughly two dozen Massachusetts cannabis businesses have closed in 2025, Dominguez said. Twice that many shut down in 2024.
California was the first state to legalize marijuana for medical use, in 1996. To date, 42 states and the District of Columbia have legalized weed for medical use, according to the trade journal MJBizDaily. Twenty-four states and D.C. have approved recreational or adult-use cannabis.
Prices fell sooner in states that legalized recreational cannabis earlier, including Colorado (in 2012) and Oregon (2014).
Weed prices are still falling in Colorado and Oregon. But they are generally falling faster in states that legalized weed more recently.
Who's to blame for the cannabis collapse?
Lobbyists and industry leaders say some of the blame lies with state regulators, who, they say, are reluctant to limit how many growers and sellers can enter the legal cannabis market.
“There weren’t many models on how to bring an illicit market into the light,” said Whitney, the cannabis economist. With unlimited licenses, he said, “you quickly get into these scenarios where supply and demand are upside down. So, you have way too much supply. So, prices are bound to decline.”
Industry advocates say states should consider capping new cannabis licenses, “and then coupling that with an economic analysis of the market,” Dominguez said, to see how many growers and dispensers a state can support.
Nationwide, the cannabis market can support roughly 50 million pounds of cannabis sales per year, Whitney said. But growers are growing more than twice that amount.
“You’ve got 2 ½ times the capacity that the entire market could bear,” he said. “That’s what’s collapsing prices.”
Cannabis customers, too, may bear some responsibility for falling prices.
Consumers will pay more for microbrewery beer, ethically sourced chocolate or Sonoma County wine. Across much of the cannabis industry, however, “craft” sensibilities haven’t really caught on, according to Gordon, Neller and other industry advocates.
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Yet, “after a while, people realize it’s all the same product,” Neller said.
Weed customers don’t seem inclined to pay more for cannabis harvested without pesticides, or trimmed by hand, or grown in a celebrated region. Cannabis cannot technically be termed “organic,” because that’s a federal classification, and weed remains illegal under federal law.
“There’s not this separate lane for something that is higher-priced, but also higher quality,” Gordon said.
California regulators have initiated an “appellations” system for cannabis, akin to regional labeling on fine wine. Perhaps that’s a start.
“If we come to a point where craft cannabis is valued for any of a number of reasons,” Gordon said, “that’s what small farmers would need to keep their heads above water.”