The economics of pot: Price of cannabis flower drops 50% from last year – Sierra Sun

Basil McMahon, a wholesale buyer and chairman of the Nevada County Cannabis Alliance board, talks about some of the challenges facing the legal cannabis industry. Prices for wholesale cannabis have dropped, meaning profit margins for growers and sellers is becoming narrower.
Photo: Elias Funez

The green rush appears to have found a choke point.

Last year, Elevation 2477’ — currently the sole legal cannabis retailer in Nevada County — purchased cannabis flower by the pound for $1,100 to $1,200. According to a wholesaler, prices have dropped by 50% this year.

“Wholesale flower prices that we are seeing right now around the state are closer to $450 to $600 for freshly harvested, high quality sun grown,” said Basil McMahon, who also chairs the board of the Nevada County Cannabis Alliance. “Last year at this point in the season, we were looking at prices around $1,100 to $1,200.”

McMahon said he expects prices to drop further and cultivators’ profit margin to narrow even more post-“Croptober” — the fall harvest period when a lot of sun grown flower comes onto the market.

Although others rejoiced during October’s heavy rains following the Nevada Irrigation District’s third driest year on record, cannabis growers committed to cultivating a second round this growing season were forced to cut some plants down prematurely to avoid waterlogged buds.

A pair of employees weigh out cannabis products being packaged into 3.5-gram pouches this week in Nevada City.
Photo: Elias Funez

For some, the late October rain interrupted a full second growing season. If cannabis is too wet, it molds, making it difficult to trim and dangerous to smoke.

But even before the unseasonal autumnal moisture, the

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