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Ohio medical marijuana prices more than double some other states

Prices for medical marijuana are high, but expected to come down as the industry continues to grow. Experts say the industry is in its infancy.

CLEVELAND — Ohio’s medical marijuana industry is growing with more patients signing up for the registry each day. And the prices they have to pay for product is more than double what you would pay in many other states. Why is that?

“We’re not even taking baby steps yet. As an industry, we’re still crawling,” said David Patton, an attorney at Patton Law Firm specializing in the marijuana industry.

“This industry is in its infancy right now. So, we don’t have a stable marketplace.”

Last week, officials from the Ohio Medical Marijuana Control Program released figures from sales when dispensaries opened for the first time on January 16th.

On day one, 8.7 pounds of medical marijuana was sold at a cost of $75,000. If you break down the numbers, that’s about $538 an ounce. In Ohio, the minimum purchase amount is one-tenth of an ounce, which would cost a little over $54 on average.

But our neighbor to the north, Michigan, has an average price closer to $23 on average for one-tenth of an ounce. Why the discrepancy?

Patton says there are a few things in play, primarily simple supply and demand.

He says, “prices in Ohio are much, much higher. But as this industry grows and develops and reaches maturity, I would expect those prices to come down.”

Patton also shared stories of patients who were willing to try their chances on the black market, instead of paying the higher costs. But that could be dangerous for patients because illegal marijuana doesn’t get tested for potency or impurities.

Another factor is tax regulations.

“Normally businesses are allowed to take tax deductions to lower their tax liability,” said Patton. For instance, a farmer would deduct the cost of fertilizer and other expenses to get a tax break. Because marijuana is still illegal at the federal level, those in the Marijuana industry don’t have that same luxury.

Finally, no laws regulate pricing of marijuana products.

Dispensaries are able to set prices wherever they see fit. However, there are rules in place for cultivators who sell to processors and dispensaries.

“Cultivators must charge the same price for the same product. So, a cultivator can’t give a price break to one customer and gouge another customer,” said Patton.

Unfortunately, that doesn’t help protect patients. But it is possible lawmakers change the rules in the future.

The good news for patients, Patton believes prices will drop as the industry continues to grow.

“Things will get better,” Patton said with confidence, adding “The market is going to hit equilibrium. And it’ll probably be more in line with what you’re seeing in places like Michigan.”

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