In this article, we are going to discuss the 20 states with the cheapest weed in America. You can skip our detailed analysis of the cannabis industry in America, the effect of legalization on prices, and the budding cannabis-based pharmaceutical industry, and go directly to the 5 States with the Cheapest Weed in America.
In the United States, marijuana wasn’t widely used for recreational purposes until the early 1900s. After the Mexican revolution of 1910, immigrants from the southern neighbor flooded into the U.S., introducing the recreational use of cannabis to American culture.
Massive unemployment and social unrest during the Great Depression stoked resentment of Mexican immigrants and public fear of the ‘evil weed’. As a result, and consistent with the Prohibition era’s view of all intoxicants, these political and racial factors led to the criminalization of marijuana in 1937 with the passage of the Marijuana Tax Act. But its legal status is now changing in many places.
Cannabis Industry in America:
The United States of America is the country that buys the most weed in the world. The American legal cannabis industry took some hits in 2022, but as we mentioned in our article – 35 Cities with the Highest Weed Consumption per Capita – annual revenue of the industry was estimated at $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 began cannabis sales – two adult-use (Connecticut and Maryland) and one medical (Mississippi). As of March 2024, 24 states have legalized recreational weed in America, in addition to the District of Columbia.
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 – Weed has never been so cheap in America. 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 green 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.
Cannabis-Based Pharmaceutical Industry:
The FDA understands that there is increasing interest in the potential utility of cannabis for a variety of medical conditions. In 2018, the federal watchdog approved the country’s first-ever drug derived from marijuana – Epidiolex. Produced by GW Pharmaceuticals, the drug is used to treat two rare forms of epilepsy.
The $7.2 billion acquisition of GW Pharmaceuticals by the global biopharma giant Jazz Pharmaceuticals plc (NASDAQ:JAZZ) in 2021 is the latest sign of the growing legitimacy and increased receptivity of cannabis-based drugs in the pharma industry. With the new purchase, Jazz Pharmaceuticals plc (NASDAQ:JAZZ) – which has focused primarily on sleep medications and oncology – has augmented its neuroscience portfolio. Net product sales of Epidiolex reached $746.4 million in 2022 – an increase of 12% from the previous year – according to an announcement by Jazz Pharmaceuticals plc (NASDAQ:JAZZ).
Pfizer Inc. (NYSE:PFE) has also entered the medical cannabis industry, betting on a promising cannabinoid-based bowel disease treatment. In December 2021, the industry giant announced the acquisition of the clinical-stage company Arena Pharmaceuticals for a total equity value of around $6.7 billion. By acquiring all shares of Arena for $100 per share in an all-cash transition, Pfizer Inc. (NYSE:PFE) has joined other big pharma companies in the cannabis space.
Pfizer Inc. (NYSE:PFE) ranks among the 10 Highest Dividend-Paying Stocks in the S&P 500.
With that said, here are the States with the Lowest Prices of Weed in America.
Copyright: atomazul / 123RF Stock Photo
Methodology:
To collect data for this article, we have referred to the Price of Weed – a global user-submitted price index for marijuana – looking for the States with the Cheapest Weed. The following states have been ranked by their average price per ounce of high quality cannabis.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
20. Texas
Average Price of Weed per Ounce: $322.93
Recreational use of marijuana is illegal in Texas, though in several cities and counties, small amounts have been decriminalized. As for legal marijuana, it’s still restrictive and requires prescription.
One of the factors contributing to the low prices of weed in the Lone Star State is that pot grown in Mexico and sold in Houston and other Texas cities still goes for about the same price as 25 years ago.
19. Georgia
Average Price of Weed per Ounce: $317.38
Weed is consumed in Georgia on a wide scale basis despite the illegality of its use. A January 2023 poll conducted by the Atlanta Journal-Constitution found that 53% of Georgians polled supported adult-use legalization.
18. Wyoming
Average Price of Weed per Ounce: $314.95
Marijuana is fully illegal in Wyoming and the state has some of the strictest cannabis laws in the United States. Wyoming is also the only state to make being ‘under the influence’ of cannabis illegal. There was an effort to decriminalize the herb in Cheyenne in 2023, but it did not come to fruition.
Wyoming is counted among the States with the Cheapest Weed in 2024.
17. Hawaii
Average Price of Weed per Ounce: $313.78
Lawmakers at a joint legislative hearing in Hawaii’s House of Representatives have advanced a Senate-passed bill that would legalize and regulate adult-use cannabis. The proposal would allow adults aged 21 and older to possess up to an ounce of weed and up to five grams of cannabis concentrates and would establish a framework for licensed, regulated sales.
16. Nebraska
Average Price of Weed per Ounce: $308.29
The state of Nebraska has decriminalized possession of small amounts of cannabis, punishing possession of up to one ounce with a $300 citation, but the sale of any amount of marijuana is still a felony.
That does not stop in-state residents from crossing into Colorado and other western states, where it is legal, to bring back cannabis products.
15. Rhode Island
Average Price of Weed per Ounce: $306.09
Rhode Island became the 19th state to legalize recreational marijuana in 2022, 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 sits among the Cheapest Legal Weed States to Live in.
14. Florida
Average Price of Weed per Ounce: $298.64
Under Florida law, it’s illegal to consume marijuana for recreational purposes. At present, the Sunshine State’s Supreme Court is mulling a decision on the language of an amendment that would authorize the use of recreational cannabis for people 21 and older while also allowing individuals to possess up to 3 ounces of weed.
Cannabis flowers currently available for sale at Florida’s medical dispensaries range between 20% and 30% THC.
13. Alaska
Average Price of Weed per Ounce: $298.12
Even though it ranks among the States with the Least Expensive Weed, Alaska’s tax on marijuana is among the highest in the nation. When local taxes are also added to the mix, Alaska taxes marijuana more heavily than any other state. The Last Frontier’s cannabis industry is saying that a change in the state’s tax rates is desperately needed to help legal marijuana businesses compete with the black market.
12. Arizona
Average Price of Weed per Ounce: $296.6
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, it 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.
11. Michigan
Average Price of Weed per Ounce: $289.09
According to a 2022 cannabis industry job report, Michigan ranks 3rd in the country by the number of people employed in its cannabis industry. However, as the industry continues to boom, some companies are beginning to fall behind.
Skymint – one of the biggest producers in Michigan – entered into receivership in March 2023 after defaulting on a $127 million loan. This is the fifth cannabis company in the Great Lake State to recently enter into receivership.
Michigan ranks among the Cheapest Recreational Weed States.
10. Maine
Average Price of Weed per Ounce: $285.08
According to data from Maine’s Office of Cannabis Policy, nearly $159 of cannabis products were sold in the state in 2022, almost double of the $82 million in sales recorded a year earlier.
Maine also witnessed a 20% increase in the number of dispensaries the same year.
9. New Mexico
Average Price of Weed per Ounce: $283.33
The first recreational dispensaries began licensed sales of cannabis in the Land of Enchantment on April 1st 2022. Gov. Michelle Lujan Grisham announced in April 2023 that the state of New Mexico saw $300 million in adult-use cannabis sales in its first year. In the first year of legalization, the government issued 2,000 cannabis licenses across New Mexico, including 633 cannabis retailers, 351 producers, 451 micro producers, and 507 manufacturers.
8. Utah
Average Price of Weed per Ounce: $280.14
In Utah, medical cannabis is legal, but recreational isn’t, and possession of even one joint can land you six months in prison and a $1,000 fine. However, cannabis is a rapidly growing industry in the Beehive State and an estimated 3,000 people apply for and receive cannabis cards every month.
Utah is included among the Top 10 States with the Cheapest Prices of Weed.
7. Idaho
Average Price of Weed per Ounce: $273.08
While its neighboring states allow recreational and medical marijuana use, Idaho remains strictly bud-free. Hundreds of consumers travel everyday to Oregon to purchase cannabis products.
In 2022, the border town of Ontario in Oregon boasted a total of $104 million in cannabis sales and this is especially impressive given that the town has a small population of only 11,000 people. According to Debbie Folden, the mayor of Ontario, the town’s cannabis market caters almost exclusively to Idaho residents.
6. Nevada
Average Price of Weed per Ounce: $270.9
While recreational marijuana has been legalized in Nevada, it is only legal if you are 21+ and smoking in a private residence. No hotel allows guests to smoke weed within its premises and that has pushed consumption onto the Strip, into parking lots, and really pretty much everywhere outside around the city.
As a solution, marijuana consumption lounges were approved in September 2022 in Las Vegas and Clark County. The lounges will be a lot like bars – which can’t sell alcohol – where residents and tourists can legally smoke cannabis products.
At $8.9 per gram, Las Vegas is placed among the Cheapest Weed Friendly Cities in America.
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Disclosure: None. 20 States with the Cheapest Weed in America is originally published on Insider Monkey.
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