In this article, we are going to discuss the 15 cheapest legal weed states to live in. You can skip our detailed analysis of the cannabis industry in the U.S., the fastest growing category in the cannabis industry, and the effect of legalization on the prices of marijuana, and go directly to 5 Cheapest Legal Weed States to Live in.
The history of cannabis cultivation in America dates back to the early colonists, who grew hemp for textiles and rope. Cannabis was also widely used as a patent medicine during the 19th and early 20th centuries, described in the United States Pharmacopeia for the first time in 1850. Political and racial factors led to the criminalization of marijuana in 1937, with the passage of the Marijuana Tax Act, though its legal status is now changing in many places.
Cannabis Industry in the U.S.:
The U.S. legal cannabis industry took some hits in 2022, but as we mentioned in our article – 15 U.S. Cities with the Highest Weed Consumption in 2023 – annual revenue of the industry is estimated to reach $31.8 billion by the end of 2023, growing to $50.7 billion by 2028. The increasing legalization of cannabis and rising acceptance of its use for medical purposes are the key factors driving the growth of the market.
Growth is also expected to come from new states. In the first two months of 2023, three states have begun cannabis sales: two adult-use (Connecticut and Maryland) and one medical (Mississippi). As of August 2023, 23 states have legalized recreational weed in America, in addition to the District of Columbia.
Fastest Growing Category in the Cannabis Industry:
The cannabis drinks segment is the fastest-growing area of the industry. According to Research and Markets, the global market for cannabis beverages was estimated at $1 billion in 2022 and is projected to reach $2 billion by 2026, growing at a CAGR of 16.9% over the forecast period. The U.S. accounts for a 70.9% share in the global cannabis drinks market.
The CBD-infused beverages are gaining popularity in the U.S. where they are becoming easily available through mainstream retail outlets. The growing interest in wellness drinks is also likely to drive gains in the market. Weed infused beverages are popping up in more places, with major drinks makers including Constellation Brands, Inc. (NYSE:STZ) and The Boston Beer Company, Inc. (NYSE:SAM) already looking for their share.
Constellation Brands, Inc. (NYSE:STZ) ventured into the weed-infused drinks industry with a $4 billion investment in the Canopy Growth Corporation (NASDAQ:CGC) and launched its first CBD drinks brand called Quatreu in the U.S. in 2021. Canopy Growth Corporation (NASDAQ:CGC) – a world-leading diversified cannabis, hemp, and cannabis device company – introduced Canada’s first-to-market cannabis infused beverage with naturally occurring caffeine under the Deep Space brand. Canopy Growth Corporation (NASDAQ:CGC) also debuted its first weed-infused iced tea this year with the launch of Tweed Iced Tea Peach with 5 mg THC. Modelo Especial, by Constellation Brands, Inc. (NYSE:STZ), became the Top-Selling Beer Brand in America this summer.
The Boston Beer Company, Inc. (NYSE:SAM) also entered the cannabis space with the introduction of its TeaPot cannabis-infused iced teas in Canada in 2022. Following the successful debut of TeaPot in Canada, The Boston Beer Company, Inc. (NYSE:SAM) announced the launch of its newest flavor this year – Mango Green Tea. Though there isn’t a set timeline yet, TePot will eventually be sold in the U.S., which is where the real ‘opportunity’ lies.
Effect of Legalization on Prices:
All the diverse effects of legalizing recreational marijuana may not be clear for a number of years, but one consequence has become evident almost immediately – Pot has never been so cheap. The retail price of a gram of cannabis dropped 13% to $9.43 in Q3 of 2022 from $10.83 in the same period the previous year – the steepest fall ever seen for marijuana in a 1-year period.
In some cases, legalizing cannabis has caused its prices to drop by up to 90%, when compared with prices during prohibition. At the peak in the 90’s, you could get $6,000 a pound for indoor OG Kush in California. Right now, farmers are reportedly getting $600 a pound for that very same strain. Notably, even high taxes on legal marijuana don’t keep the legal price anywhere near what it was when the drug was more broadly illegal.
The major reason for this drastic decrease is Econ 101 – Supply and Demand. As the cannabis industry has boomed since legalization started a few years ago, more and more players have popped up to grab their slice of the sweet ganja pie, which has resulted in an increasing number of growers producing more weed than stores know what to do with. The black market is also forced to drive prices down as the legal market gets more competitive.
Competition among cannabis growers is also increasing as more cities allow operations. In 2021, the number of municipalities allowing marijuana businesses jumped to 118 from 87 in Michigan alone, while the number of licensed businesses jumped by nearly 150 to 1,238. Between 2020 and 2022, the number of growers nearly quadrupled to 1,238, and more than a third of those – 458 – are classified as Class C, larger operations that can harvest 2,000 to 10,000 plants.
Legalizing the plant also opens doors to more innovation. Cannabis is an annual plant that gets planted in the spring and usually harvested in the fall. But farmers figured out that they could trick the plant into flowering early by depriving it of light and creating ‘longer nights’. This is done by throwing tarps over a greenhouse while the day is still going, making the plant think that it’s actually the fall and the night is really long. Light Deprivation has completely revolutionized cannabis cultivation and consumers will now be able to have the best products year-round and pay very low prices for it.
Prohibition imposes huge costs on drug producing industries that are passed on to consumers in the form of higher prices. These higher prices are among the principal reasons (the others being stigma and fear of punishment) that illegal drugs are used so much less frequently than legal drugs such as alcohol and tobacco. Marijuana is a rare example where we can see the impact of legalizing a drug in real time, which shows that if the production and sale of heroin and cocaine etc. were also legalized, those drugs would also become dramatically cheaper.
With that said, here are the Cheapest Places to Live with Legal Weed in America.
Methodology:
To collect data for this article, we have referred to the Price of Weed – a global user-submitted price index for marijuana – for the average price per ounce of high quality recreational weed in the states it has been legalized in. Then we referred to the Missouri Economic Research and Information Center, looking for the cost of living index of the states that have legalized recreational marijuana. A cost of living of 100 means its the same as the national average. Finally we calculated a weighted average of the above-mentioned criteria, assigned a score to each state based on its average and ranked it accordingly. When two states had the same score, we ranked them by their average price of weed per ounce.
Following are the Cheapest Legal Weed States to Live in in 2023:
15. Connecticut
Average Price of Weed per Ounce: $338.3
Cost of Living Index: 113.1
Insider Monkey Score: 12.5
Cannabis in Connecticut has been legal for recreational use since July 1st 2021. However, adult-use cannabis sales officially began across the state on Jan 10th 2023. During the first month for the adult use market, over $5 million was made in cannabis sales, which then doubled to $10 million in May. While legal cannabis sales have been going up, there has been a downturn in prices.
14. California
Average Price of Weed per Ounce: $258.8
Cost of Living Index: 134.5
Insider Monkey Score: 12
California is the state with the best weed in America in 2023, as per the quality and availability of the plant. The price per pound of cannabis fell in 2021 because of massive overproduction across California. The tough competition from the black market also forces retailers to keep prices low, as 2 out of every 3 cannabis purchases are made in the illicit market. Las Vegas ranks among the Cities with the Cheapest Weed in the World.
With $5.3 billion in legal sales last year, the Sunshine State is the Largest Cannabis Market in the World.
13. Rhode Island
Average Price of Weed per Ounce: $306.09
Cost of Living Index: 110.5
Insider Monkey Score: 11
Rhode Island became the 19th state to legalize recreational marijuana last year, when Gov. Dan McKee signed a bill into law that, in part, set up a framework for retail sales and taxation. That framework included establishing a Cannabis Control Commision to oversee and regulate the industry.
Rhode Island ranks 13th in our List of Cheapest Legal Weed States in America.
12. Delaware
Average Price of Weed per Ounce: $339.67
Cost of Living Index: 102.6
Insider Monkey Score: 11
On April 13, 2023, Delaware became the 22nd state to legalize recreational marijuana use. The new regulations authorize the operation of 30 marijuana retail outlets in the state, beginning around September of 2024. A total of 60 cultivator licenses, 30 manufacturing licenses, and 5 testing licenses will be available with most biannual licenses carrying a $10,000 fee.
11. Missouri
Average Price of Weed per Ounce: $352
Cost of Living Index: 88.4
Insider Monkey Score: 10
The state of Missouri has recorded over $500 million in marijuana sales since it was fully legalized in February 2023. Since legal sales began in 2019, the state has collected nearly $100 million in revenue in taxes and program fees, according to the authorities.
Missouri is 11th on our list of the cheapest legal weed states in our list.
10. Illinois
Average Price of Weed per Ounce: $351.6
Cost of Living Index: 90.8
Insider Monkey Score: 10
Recreational marijuana sales in Illinois finished 2022 with more than $1.5 billion, up 13% more than 2021. The Prairie State also made $562 million in taxes from cannabis last year.
Illinois is trying to level the playing field in the cannabis industry and since last November, more two dozen operators have won social equity dispensary licenses – designed to create space in the industry for entrepreneurs from disadvantaged backgrounds.
9. Arizona
Average Price of Weed per Ounce: $296.8
Cost of Living Index: 107.2
Insider Monkey Score: 9.5
Arizona is one of the more progressive states when it comes to cannabis banking. However, It is a restrictive and expensive environment. Once a bank notifies regulators that it is working with cannabis-related businesses, the bank is designated as a CRB. The CRB banks are subject to more oversight by the FDIC, and hence charge higher fees for their services.
Adult-use cannabis sales in 2022 reached $950 million, soaring to 70% of the state’s total marijuana sales for the year. Phoenix is among the Cities with the Highest Weed Consumption in the World.
The Grand Canyon State is one of the top 10 cheapest legal weed states to live in.
8. Maine
Average Price of Weed per Ounce: $285
Cost of Living Index: 111.5
Insider Monkey Score: 9.5
Maine is one of the cheapest legal weed states in 2023. According to data from Maine’s Office of Cannabis Policy, nearly $159 million of cannabis products were sold in the state in 2022, almost double of the $82 million in sales recorded a year earlier.
Maine has also witnessed a 20% increase in the number of dispensaries over the last year.
7. Washington
Average Price of Weed per Ounce: $233.9
Cost of Living Index: 115.1
Insider Monkey Score: 8.5
Seattle Mayor Bruce Harrell signed three ordinances last year aimed at improving equity and helping people of color break into the state’s mostly white legal cannabis industry.
Retail sales of cannabis reached $1.4 billion in Washington in 2022.
Washington counts among the best states to live in with legal weed.
6. Oregon
Average Price of Weed per Ounce: $210.2
Cost of Living Index: 115.1
Insider Monkey Score: 8
Portland was declared the ‘Best Weed City’ of 2023, according to a study by Real Estate Witch and Leafly. Portland Community College is now offering cannabis programs to students who want to pursue a career in the marijuana industry upon graduation. Since the inception of Oregon’s legal cannabis market in 2015, it has become an almost $1 billion industry. Oregon ranks 6th among the Most Affordable Legal Weed States to Live In.
Click to continue reading and see the 5 Cheapest Legal Weed States to Live In.
Suggested Articles:
- 26 Biggest Marijuana Companies in the World
- 11 Best Marijuana Stocks to Buy Now
- 20 States with the Most Craft Breweries
Disclosure: None. 15 Cheapest Legal Weed States to Live In is originally published on Insider Monkey.
Hedge Fund Resource Center