I have consumed cannabis in 18 recreationally “legal” states. I put legal in quotes because the state governments say they are legal, but until you can go to a hash bar and burn one inside or smoke on the streets the same way you can smoke a cigarette (that will kill you), the way you actually can in New York City, it isn’t really legal, is it? But I digress.
In consuming in these states you see generally two legislative rollout structures: unlimited licensure like in Colorado and limited licensure like in Illinois. Each type of structure has its own challenges and benefits, but the most notable difference between unlimited licensure vs. limited is the price. Which makes perfect sense.
For the finance majors out there, you know that unlimited licensure is much closer to a “perfect competition” economic model. This is a model that doesn’t actually exist, because if it did, all company profits would be “competed away,” allowing for the consumers to be the ultimate beneficiaries, paying very little for their cannabis, hypothetically.
“In Denver there are more dispensaries than there are Starbucks and McDonald’s combined.” I heard this quote several times before moving to Denver in 2016, and as many retail locations as that would implicate, the reality was that description was honestly a low-ball estimate. I would say there was a dispensary on damn near every corner of many densely populated retail areas.
When I moved from the Denver area in 2022, you could grab a zip of some crappy dispo weed for a buck twenty-five. Fast forward 48 hours later and I’ve moved to the south suburbs of Chicagoland where comparable quality was fetching $300–$400 a zip. I couldn’t believe it. Moving from CO to IL in 48 hours was a masterclass in different economic systems and how those systems are formed through legislation. A contrast usually only reserved for a situation like going from one nation’s economy to a neighboring nation’s economy; but without federal legalization in the U.S., we see a great contrast in systems of neighboring states that is largely contingent on that state legislation.
It is probably apparent that with limited licensure in municipalities that have opted into cannabis commerce, a few big players essentially corner and thus “price fix” the market, keeping margins high while consumers pay top dollar (or go to Michigan, at least for now…).
If you want to know what dispensary MSOs lobbied in cannabis legalization in the state of IL and therefore have politicians in their back pockets, it is the following companies:
Verano
Pharmacann
GTI
Cresco
Curaleaf
Make no mistake about it, these companies have created an oligopoly in the cannabis space, and some (not all) are guilty of some pretty shady other shit.
At the end of the day, this oligopoly creates a shit product, because if you want cannabis you pretty much have to go to one of these MSO dispos putting out a mass-produced commodity. Without the mom and pops on every corner, no one is keeping these larger players honest. Those mom and pops in Denver under unlimited licensure allowed for a more competitive and democratized market. Now again, still cons to this market, like the little guy tends to get pushed out as larger operations consolidate and acquire other producers, a trend I have seen in CO in real time, sadly.
At the end of the day, all signs in the U.S. state-based markets point to the same thing: a race to the bottom on quality and further commoditization of this sacred herb. So my readers know where I’m going to go from here…… Grow your own. One Love.
