Cannabis Not Suffering Retail Inflation – mg Magazine Cannabis News

If you’ve been to the grocery store lately, you’ve probably noticed prices creeping up. The increase is directly caused by a recent spike in inflation that has both consumers and economists worried. Fortunately for cannabis consumers, Headset‘s data indicates inflation hasn’t crept into the cannabis industry — at least for now. Let’s take a closer look at what the data tells.

What is inflation and why should you care?

According to Forbes, “inflation occurs when prices rise, decreasing the purchasing power of your dollars.” Essentially, inflation is the reason you see your dollar buying you less than it used to. It’s why bacon cost $1.46 a pound in 1980 but cost $5.58 per pound in 2020 (a nearly 282-percent increase — sorry, bacon lovers).

Advertisement Is inflation impacting the cannabis industry?

To discern whether inflation is affecting the cannabis industry, first we must examine average prices over time. Let’s dive into the graph below, which tracks average item price across all cannabis products in U.S. recreational markets over the previous year.

Graph: Headset

Here we can see prices in most adult-use markets in the U.S. have remained fairly stable over the past twelve months. Michigan is the clear outlier with a significant drop in average item price from $25.38 in July 2020 to $19.32 in June 2021. Considering prices typically trend down in new markets, it’s unsurprising to see prices in Michigan’s two-year-old market experience a decline. Supply often can’t keep up with demand shortly after legalization, thereby driving prices up for roughly two to three years until the supply imbalance is addressed, at which point the market stabilizes.

Nevada experienced some pricing volatility during the pandemic, which can be attributed to the market’s weakened demand brought on by a sharp drop in tourism. Prices in Oregon sales

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