Industry experts are predicting that when legal weed goes on sale in Illinois next year, you can expect it to be pretty pricey.
The cost of legal medical marijuana in Illinois is already pretty expensive. While some estimates suggest that the average price of an eighth runs somewhere around $37.50 in Illinois, Dan Linn—executive director of Illinois NORML—said it can run as high as $60 for an eighth. And Linn expects legal recreational cannabis could run even higher.
A combination of factors will serve to push prices up. The first will be steep tax rates, which have contributed to skyrocketing prices in states like California, which are struggling to compete with black market rates. Illinois is also likely to face an initial supply shortage, which will see retailers hiking prices up even further.
This problem doesn't mean that nobody will buy the stuff, according to Linn, but it does mean the illicit market will continue to have a strong presence in the immediate future.
"Consumers who already have access will probably decide to continue to purchase it illegally below that $60 amount," Linn told the Chicago Sun-Times. "But I think the tourists and out-of-staters will purchase it, as well as people who are just happy to be able to legally purchase cannabis for the first time in their life in Illinois."
Looking at data from states with more mature legal markets, like Oregon and Washington, it's safe to assume that prices will eventually level out. Despite Washington's nearly 40 percent tax rate on cannabis products (the highest in the country), the average price of a gram remains below $5 dollars, largely because of the competitive marketplace.
But, perhaps the biggest thing preventing new cannabis markets from getting off the ground with more reasonable prices is federal prohibition.
National law currently blocks the sale of cannabis across state lines, even if it's moving from one legal state to another. Repealing prohibition would allow interstate sales, so Oregon, which has an overabundance of cannabis right now, could sell products to new markets like Illinois. This would help states avoid steep prices at the outset of legalization, explained Bethany Gomez - Managing Director of the cannabis industry research firm Brightfield Group.
"You can only use what is cultivated within the state, so there is certainly higher pricing when there's a supply shortage. As capacity ramps up, if there's an oversupply, then there's a depression in pricing."
Since Illinois won't have access to out-of-state producers, it'll take a few years for in-state cannabis production to ramp up. And that means that legal cannabis is probably going to be a little more expensive than you'd like when it goes on sale in Illinois on January 1, 2020.