State of Nevada Marijuana: An Insider’s Perspective: Part 2
Week 2 of Recreational Sales; this article is part 2 of a 4-part series.
By: Zed Schlott, The Dispensary, NV
Welcome to the State of Nevada Marijuana, Part 2. Come back Tuesday, 8/22 for Part 3!
I’ve noticed that most of the growers in town have put a significant amount of time and energy into branding their company. People don’t want to buy marijuana because it was grown by a brand; people buy marijuana based on how good it smells and looks. This system reminds me of meat sales: People buy 92%, 85%, 70%, or grass fed. No matter what, they are going to buy meat. It just depends on how much disposable income they have, combined with their preference for quality, to decide on a particular product. I guarantee if we put a specific strain on sale for $10 off tomorrow, it would move 3X faster than anything else in the store no matter who grew it. This is no different. Marijuana is like a commodity. The brand is nice and all, but the well-priced, quality product is what will continue to thrive, not only in the Nevada market but across the industry in general.
In the last few weeks, prices have surged on the cost per pound. The proactive stores (or should I say ones with enough working capital) were able to capitalize on a lot of deals which will make them well-positioned to offer discounts and deals that others won’t initially be able to match. Just a month ago, the average price for A-grade flower was hovering around $1600-$2000/pound, with a few growers charging a premium well beyond this, but that remained unchanged for quite some time…and for good reason…if you’re growing the best stuff, you know who you are.
The lower quality flower was priced between $1200 and $1600 for the last several months. These same brands have risen to +$2,000-$2,500/pound. With a newly added tax of 15% for all wholesale purchases, this price is expected to rise to $2,300-$2,800 for mid-grade buds in the interim. Top shelf flower will likely hover around $3,000-$3,500 during this transition phase while cultivators continue to expand to meet increased demand. Many have wondered if cultivators are holding onto products with the hope straining the market and driving up prices, but it’s all speculation.
Prices are going to surge either way. Medical patients in Nevada and elsewhere, PLEASE visit Sparks or Henderson. These municipalities have put a temporary moratorium on recreational sales. The biggest advantage of these locations will be no waiting in lines full of new recreational buyers. Second, I feel prices might stay more stable in these locations, but who knows what might come if the average price per pound rises into the higher $2,000’s. If this ends up being the case, dispensaries will be charging a premium, not offering discounts…even at medical stores. Along with the added incentive of only paying a lower tax rate (8.25% vs 18.25%), it may be worth it to make the drive to the suburbs to buy Nevada marijuana starting this weekend. They’ll need the support until the moratorium ends!
This post is part 2 of a 4-part series, The State of Nevada Marijuana: An Insider’s Perspective.
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