A few days into the experiment, the new world of legal-recreational-marijuana sales in Colorado appears to be a big success — so much so that pot shops are finding it impossible to keep up with demand.
According to the Denver Post, at least 37 stores in Colorado were licensed to sell recreational pot to anyone 21 or over as of New Year’s Day. The Associated Press and others reported long lines outside Denver pot shops, with some eager customers forced to wait three to five hours before getting a chance to go inside, step up to the counter and make a purchase.
Prices have been steep — in some cases, stores were charging $50 or even $70 for one-eighth of an ounce of pot that cost medical marijuana users just $25 the day before — and taxes add on an extra 20% or so. Even so, sales have been brisk....
Prices in legal pot shops have already risen to upwards of $400 an ounce. Once you factor in taxes, as well as the fact that it looks like shops may periodically be sold out for a while, and some are saying the situation is one that could push pot enthusiasts back to buying marijuana on the black market. “People will get real tired of paying the taxes real fast,” one street dealer in Pueblo named Tracy told the Chieftain. “When you can buy an ounce from me for $225 to $300, the state adds as much as $90 just for the tax.”
Point 1: Demand increases cause higher prices.
Point 2: One of the arguments for legalization of marijuana is that buyers are willing to pay a premium to avoid the risk of fine/arrest by buying from non-licensed dealers (aka the black market). One of the itneresting questions that will play out in Colorado is just how large the difference between the legal price and the black market price will be.