Last week Colorado became the first US state to legalise the sale of Cannabis for recreational use. Previously Cannabis has only been legal to purchase for proven medicinal use but with the recent legalisation the cost of Cannabis has more than doubled in price. This price is due to the demand for the drug heavily outweighing supply and has certainly not deterred consumers from purchasing it.
The first shops to sell Cannabis opened their doors on New Years day in Colorado, only to later have to prematurely shut up shop due to running out of supplies. The drug is not cheap to buy, and customers can expect to pay anything up to 500 US Dollars for an ounce of the purest strain. This is equivalent to around 300 GBP. It would seem, that with stores running out of supplies, that the hefty price tag is not deterring people from purchasing Cannabis. However supply and demand is not the only reason for the huge price increase, 25 percent of the sale price is due to recreational sales tax imposed by the US State. With such high returns, the state are set to benefit hugely from the ongoing sales. In fact it has been estimated by The National Cannabis Industry Association that well over 5 Million dollars worth of sales have been made on recreational Cannabis in the first 5 days alone.
Much like alcohol, shops will have to apply for a special permit, licensing them to sell recreational Cannabis. With the sale of Cannabis proving so lucrative it is likely that more and more shops will apply for license to sell. The increased competition between stores will likely see the price of Cannabis steadily drop before plateauing out. But if early sales are anything to go buy,. It seems that consumers are willing to pay quite a price to get their hands on legitimate recreational use Cannabis.
Local politicians have expressed surprise at the demand and the price of the drug, but have said that they are confident that prices will level out quickly enough to deter consumers from going back to purchasing off the black market. If this doesn’t happen quickly enough then they will need to review the added tax in order to reduce to cost. Whatever happens, with so much debate going on in other countries including Great Britain, around the legalisation of Cannabis, it will be interesting to watch how sales level out and how the local Government handle it.
One chief concern that seems to have been overlooked, is that with so many individuals purchasing Cannabis, are they really aware of the possible health implications and side effects that can adversely affect some individuals. Research has shown strong links between Cannabis use and the impaired healthy development of the brain in teenagers. It has been suggested that those who are predisposed to mental illness, could indeed trigger an episode from using Cannabis. There is also the issue of potential Cannabis addiction, it is impossible to regulate sales to purely “recreational use” as the name of the sale suggests. Undoubtedly there will be some who will become addicted to the drug due to its new legalised status. The government in turn will then have to invest money into treatment, just as with alcohol, tobacco and over the counter medicines that have proven to be addictive to some. Perhaps the early flush of sales is due to the publics curiosity and determination to exercise freedom of choice, only time will tell, but it will certainly be interesting to watch how things develop further down the line.