Inflation has been dominating the headlines lately. Prices for gasoline, food (e.g., beef, bacon, eggs), used cars and many other items have spiked over the past year. It seems like there is always breaking news of the latest shortages – baby formula, tampons, eggs, semiconductors, sriracha, lumber, bicycles, etc. Cannabis, however, has seemingly been immune to inflation as prices have actually declined in many states over the past year.
Many factors are causing inflation generally, even if the phenomenon is simply described as “too much money chasing too few goods.” And although many of these factors still have an impact on the cannabis industry, the unique supply and demand conditions of the cannabis market have prevented cannabis price increases and product shortages.
Cannabis is defined by state — and not national or international — market conditions
Cannabis is still illegal at the federal level. Cannabis cannot legally cross state borders even though two contiguous states may have legalized cannabis for medical or recreational use. The cannabis market is defined by how much cannabis can be cultivated, produced and sold in each state.
In many states like California, Colorado, Oregon, and Washington, the number of cultivators is far greater than the
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