Washington's recreational cannabis market is setting the standard for market share, according to a study from the University of Waterloo in Canada.
The study, which only surveyed cannabis consumers, found that consumers in Washington buy cannabis through the legal market at a higher rate than consumers in any other legal state in the nation. Seventy-seven percent of survey participants in Washington indicated that they purchase at least some of their cannabis from legal sources, compared with 57 percent across all states where cannabis is legal. The survey had more than 52,000 participants from Canada, the U.S., Australia and New Zealand between the ages of 16 and 65. Nearly 7,300 of them were from Washington state.
"We are often asked about the impact Washington's regulated marketplace has had on the illicit market. This study is the first one that we are aware of that shows the degree to which Washington consumers choose licensed cannabis retail stores over illegal sources," Rick Garza, director of Washington's Liquor and Cannabis Board, said in a statement. "It shows that the legal market we have is working largely as it should."
As the study shows, the emergence of legal markets has not eliminated the presence of illicit markets for cannabis. Some 23 percent of respondents still buy cannabis from illegal sources for a number of self-reported reasons, including price and convenience. The study doesn't mention the quantity of cannabis purchased by those who say they buy from legal sources and those who don't.
California legalized cannabis in 2016 but has struggled to move consumers away from illicit sources. In October, cannabis website Leafly published a report that found only 45 percent of cannabis purchases in California took place in the legal market. And just last month, Politico published a story about the strength of the black market in California titled "The black market strangled California's legal weed industry. Now it's coming for New York."
One of the reasons Washington's legal market has been able to outperform the national average and claim such a large market share is the simple factor of price.
When Washington's first recreational retail stores opened in July 2014, the price was much higher than the black market because there simply wasn't enough legal cannabis to meet demand.
"We knew then that if the total price dropped to below $12 per gram that the regulated retail market would be able to compete with the illicit market," said Garza, with the state's LCB. "As more stores opened, the price steadily fell month over month until it stabilized in the last five years."
Despite the highest cannabis taxes in the country, the Waterloo study found that the average price of legal cannabis cost just $7.38 per gram in Washington. That number is well below the price of illicit cannabis in Washington, which averages $13.58 per gram, as well as both the national illicit average of $9.94 per gram and the national legal average of $8.75 per gram. ♦
