Why Is Medical Marijuana In New York More Expensive Than California?
The gap in prices is due to the different business models used in each state.
The price and quality of medical cannabis can vary from state to state. Patients moving from the west coast to the east are often surprised by the cost fluctuation and difference between states. Cannabis can be grown with the same materials and techniques on both coasts. So how is medical marijuana in New York more expensive than California? The main reason for the variation is that each state uses their own business model.
Vertically Integrated Business Model
According to Doug Greene, the legislative director of Empire State NORML, “there are vape pens you can get for $30 or $40 in a state like Colorado.” He added that you would have to pay $100 in New York for “an inferior product.”
The reason prices are higher in New York is because the industry is run on a vertically integrated business model. New York medical marijuana providers are responsible for growing, processing and distributing the product. This makes getting into the industry an expensive process, decreasing competition in the state.
There are only about 20 dispensaries where you can buy medical marijuana in New York. They are spread out so most patients are forced go to the closest option. To make matters worse, once you’re inside a dispensary there isn’t as much of a selection as there would be in a state like California. Cannabis consumers in a California dispensary can compare and contrast products from various brands.
On the other hand, everything you see in a New York dispensary comes from a single source. If you don’t like one of their products, you might not like any of them. The lack of competition allows dispensaries in the state to set prices high without the fear of being undercut.
Horizontally Integrated Business Model
California went a completely different route. The California medical marijuana market is run on a horizontal business model. As a result, businesses in the state can focus on one aspect of the industry like growing, selling, extracting or infusing.
Since a dispensary can be opened in California without having to also open growing and processing facilities, there are many more places to find medical marijuana. There are hundreds of dispensaries in the state.
Furthermore, the freedom to purchase from various growers and extractors has created more options to choose from at each dispensary. The competition has forced growers to increase their quality while decreasing their prices.
As a result, medical marijuana patients in California have various price points to choose from. You can get affordable in-house products or brand name nugs from some of the best growers in the nation.
Medical Marijuana In New York More Expensive Than California
The prices in New York are drastically higher than California because of the varying levels of competition. According to Rosalind McCarthy, founder of Minorities for Medical Marijuana, prices will go down “as New York starts building out their market and getting more licenses in.” At the rate state’s program is moving, it will take a long time for the cost and quality of cannabis to resemble California’s current market.