While tobacco companies across the nation are hiking up their cigarette prices, the price of weed is continuing to plummet. To make this more concrete, consider that smokers in New York are now paying as much as $14.50 for a pack of cigarettes. Meanwhile, a pound of cannabis in Colorado is currently down 24.5 percent to $2,688.
As more states legalize cannabis, more cultivators will enter the game. And there’s a good chance that will force weed prices to continue to drop. These trends might seem counterintuitive. So to make sense of it all, let’s take a closer look at why cigarette prices are skyrocketing while weed prices are dropping.
Why are the prices of cigarettes rising?
The price of cigarettes in the United States is influenced by several variables. But arguably the most significant ones have to do with cigarette taxes.
At the moment, the federal tax on cigarettes is $1.01. But this isn’t the whole picture. There are also state and local taxes that cause dramatic fluctuations in the price of cigarettes.
This is also where things start to get a little bit confusing. A lot of that confusion comes from the fact that these state and local taxes vary dramatically from place to place. New York, for example, currently has the highest cigarette tax rate in the country. There, it’s over $4.00 per pack. That number will look significantly different depending on where you live.
And to make things even more confusing, state and local taxes aren’t fixed. In fact, they change quite often as lawmakers and voters choose to adjust cigarette taxes.
One reason why states choose to change cigarette tax rates is public health. Proponents of this argument claim that raising taxes on cigarettes will discourage people from using them. And as a result, fewer people will suffer the health problems caused by smoking.
There are also economic arguments for changing cigarette tax rates. According to some experts, economic activity and productivity go up when fewer people smoke. These analysts claim that higher taxes will discourage people from smoking them. And that will result in less time spent taking smoke breaks and more money that can be spent elsewhere.
Finally, cigarette taxes also help fund various public programs and services. For example, New York used revenues from cigarette taxes to pay for garbage trucks and a new county jail.
All of these variables affect the overall price of cigarettes. And lately, the trend has been to make them more expensive in an attempt to discourage people from using them while also generating some extra tax revenues.
Weed Prices Drop
Now let’s take a look at cannabis prices. Weed prices have been dropping in recent years for a number of reasons.
For one, it’s become legal in more than half of the United States. This has created a huge uptick in the number of cultivators, which in turn has led to a massive increase in the supply of weed in the U.S.
When there’s more supply than demand, prices drop. And they continue dropping until the supply and the demand balance each other out.
If you’re a fan of weed, this weed-saturated market seems like a dream scenario. But it’s a little more complicated than that. There are actually a number of pros and cons to what’s currently going on.
The biggest pro is there is plenty of weed for everybody, especially those who need it. It’s a classic case of supply and demand. According to Forbes, the average wholesale price of weed dropped by 60 percent in the last year alone. It fell from $2,500 per pound to $1,000 per pound.
If this pattern continues the supply will far outweigh the demand and growers will be forced to up quality in order to survive. Supply has outstripped demand in places like Colorado. And that’s led to drops in weed prices as high as 48 percent.
Since the wholesale price of pot has dropped, profits are already down for many growers. Because of this, they can’t grow as much as they might otherwise be able to. Already, certain strains are becoming extinct or extremely hard to find as growers are forced to focus on only the most profitable crops.
Similarly, the drop in weed prices has forced growers to find ways to cut costs just to stay afloat. And that can lead to questionable practices. For example, some growers spray their weed with plant growth regulators to make their buds more dense and profitable. But many sprays and additives are dangerous. Some can cause health issues like liver damage, cancer, and infertility.
To avoid all this, it’s best to do your research. Figure out where your herb was grown, and what growing practices they used. And if you’re in doubt, try to stick with reputable growers like the Jungle Boyz collective or other similar companies.