Pennsylvania’s Falling Wholesale Cannabis Prices Not Reflected at Dispensaries

In Pennsylvania, medical cannabis dispensaries saw record sales in the past 12 months. This is partly due to retailers getting more bang for their bucks.

According to a Health Department, while wholesale dry-leaf cannabis price dropped from $10.65 per grams in January 2021 down to $6.65 by February 2022, that’s a 37.6% decrease. Retail cannabis prices, however, dropped from $14.90 to $13.40 pergram, or 10.1% less. Presentation during the state’s Medical Marijuana Advisory Board (MMAB) March 22 meeting.

Pennsylvania dispensaries have seen month-on-30 sales increases over the past year compared with the previous 12 months. According to the Health Department presentation, December 2021 saw a record sales of medical cannabis dispensaries in excess of $135 million. December 2020 saw sales of less than $100 million.

In particular, the 37.6% decrease in wholesale prices compared the to 10.1% decreases in retail prices wasn’t adding up for John Collins, director of the Pennsylvania Office of Medical Marijuana, a position he’s held in the Health Department since August 2016. He plans to retire in the latter part of this year.

He called the trend while presenting the data Tuesday during the advisory board meeting. “troubling”Customers should take advantage of any wholesale cost savings. The Tribune-Democrat reported.

“There is a significant opportunity to pass along savings to patients. Speaking for them, they should demand this be passed to them,” Collins said, adding that the advisory board should scrutinize why retail prices aren’t falling at the same rate as wholesale prices.

As of March 7, there were 156 dispensaries selling medical cannabisPennsylvania has the following products.

The state has seen $4.8 billion in sales since April 2018, when commercial sales were launched. $1.9 billion was from growers/processors to dispensaries. $2.9 billion was from dispensaries to customers. According to the Health Department. There are currently 406,454 active certifications for patients in the state.

The state’s advisory board works to ensure that Pennsylvania’s medical cannabis program provides patients with access to the latest treatments, and the body meets regularly to discuss patient care, patient safety and new research methods.

Collins, an NPR-affiliate, stated that there was a red flag concerning the retail prices during Tuesday’s meeting. He also responded to a question by Keara Klinepeter from the Health Secretary. WSKG reported.  

“We’re seeing the evidence of a competitive market, but this is again illustrating a bit of a holdback on passing those savings along to patients,” Collins said.

His presentation also covered the retail market competition in the past two years.

There were 77 dispensaries in operation that collectively generated roughly $13,000,000 in dry-leaf revenue in January 2020 ($169,000 per dispenser on average), while 155 dispensaries operated for approximately $53,000,000 in dry-leaf revenue in February 2022 ($342,000 each dispensary).

Despite sales volume increasing, dry-leaf wholesale pricing trends continued to decline faster than retail price trends.

Jeff Riedy, executive director of Lehigh Valley NORML, said that dispensaries are more expensive and some patients have to look for the illegal market.

“We’ve been pressing the department for many years, obviously since the program began, that everything was priced out of the range of many patients,”Riedy said.

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