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No Bottom in Sight – Cannabis Flower Prices Drop 42% over the Past Year in Massachusetts

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Pricing of cannabis products has always been somewhat of a grey area for the cannabis industry over the most recent legalization roll out. Different factors influence the price of cannabis products, and we see different trends across the various states with legal markets. This has resorted in a record drop in the average price of cannabis per ounce to $220 in October in legal markets across America. This dip has occurred despite the fact that 2022 has seen a 11.6% increase in the sales of adult-use cannabis from last year.

What is causing this trend and why does it seem like Massachusetts is the worst hit with a 42% drop in the cannabis flower process since the past year? Could it be particular to Massachusetts alone or it is a bigger problem facing the cannabis industry nationwide? Read on as we answer these questions and more on why cannabis flower prices are suddenly down in Massachusetts.

Adult-use cannabis sales commenced in Massachusetts in November 2016 to complement the existing structure of medical marijuana in the state. Upon the commencement of this arm of the cannabis industry in the region, sales and prices skyrocketed. The price of cannabis flowers was at an all-time high in October 2021 when the rate was $3,625 per pound. Illinois is the only state known to record such high prices as Massachusetts during this period as products there were almost $4,150 per pound.

The gross sales of cannabis retailers from when adult-use cannabis sales began in Massachusetts till now stand at over $3.73 billion. This sum is shared across different varieties of cannabis products that are actively being sold within the state. Cannabis buds make up the larger percentage of the overall market (43%) while other products such as vape products (17.6%), edibles (14.6%), raw pre-rolls (12.4%) and concentrates (9%) make up the remainder of the market.

For those in the cannabis industry, the trend of the downward price of cannabis has been a very significant and dramatic drop that many did not foresee. For the sake of clarity, it must be stated that the fall in wholesale and retail cannabis prices has been a nationwide phenomenon. The cannabis industry recorded its lowest cannabis price level in three years between Q2 and Q3 of 2022. Though an increase in prices was seen in April in commiseration with the 4/20 celebration, prices have gone down since then. Nonetheless, sales have still been in the high ranges which means that other factors have been affecting the price of the products in relation to available demand.

The drop in cannabis sales across different states has been due to general and peculiar issues. The cannabis industry in Massachusetts has its peculiarities which factored in the sudden 42% drop in cannabis prices and these reasons are not far-fetched.

First on the list of factors that gravely affected the price of cannabis products in the state is the increase in the number of cultivators in the state. Massachusetts stood put as one of the states with expensive wholesale and retail cannabis prices when it started adult-use retail. The high prices were largely due to the fact that the state had a limited number of licensed cultivators to meet the available demand. With the absence of proper systems and channels to move cannabis across states lines, cannabis users had to procure at high rates.

The development of the cannabis industry however has seen the influx of an increased number of cultivators within the state. When these cultivators commenced large-scale production, the supply was starting to complement the demand and resorted to lowering prices being observed. This market drift is similar to that of Illinois where the expansion of the canopy by existing cultivators prompted an increase in production and supply. This supply catered for the demand and curbed scarcity which was the major factor boosting the prices of the products.

Another factor that gravely affected the prices of cannabis flowers in Massachusetts is the actions of neighbouring states. Vermont, Rhode Island, New York and Connecticut have or are about to implement changes in their operational cannabis markets which has had indirect effects on Massachusetts’ market. Many Vermont retailers expanded their market structure on Oct. 1 while Rhode Island is expected to follow suit by Dec. 1, 2022. These moves along with the expected commencement of sales of adult-use cannabis in New York and Connecticut have had a massive impact on the cannabis process in Massachusetts.

The available competition has spurred the maturity of the cannabis market to where it is now. The presence of competitors has seen the average flower price in Massachusetts plummet from $381 per ounce in October 2021 to $220 per ounce in October 2022. According to the Cannabis Control Commission of the state, the flowering process also dipped by $40 per ounce between September and October. This shows the influence of the new markets is a major factor in the drop and we could still see more price dip in the coming months.

While it might be too early to give conclusive statements, it is obvious that the fall in cannabis prices in Massachusetts was not a fluke. The presence of increased suppliers within the state has reduced the scarcity of the product which was a determining factor in skyrocketing the prices in the first place. Likewise, the presence of complementary markets in neighbouring states has a direct influence on what applies to the cannabis industry in Massachusetts.

None of these factors is going away anytime soon so it is possible that this reduction in prices can be the new norm for the people of Massachusetts. While this is sure to be good news for the end consumer who now has to pay less for the same quantity of products, it is not for the producers. Like any mature market, the cannabis industry in Massachusetts will have to adapt to the new norm and see how things pan out from there. 

 

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What Can Other Countries Learn from First-Mover Canada’s Shrinking Medical Marijuana Industry?

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Since its peak, the regulated medical cannabis industry in Canada has declined a bigger rate than most people thought would happen with recreational legalization. This decline began even before the legalization of recreational marijuana in October 2018 to be precise, and has continued as adult-use sales have replaced controlled medical cannabis purchases.

 

According to experts, the ease of purchasing from adult-use retailers, difficulties for doctors in approving medical cannabis, a lack of tax benefits for medical cannabis consumers and producers, and the fact that THC potency thresholds apply to both medicinal and recreational cannabis products are all contributing factors to the medical market’s decline.

 

Those problems could serve as lessons for other countries and regions that approve medical marijuana first before legalizing it for adult usage.

 

THE SITUATION IN CANADA

 

According to data from Statistics Canada, medical cannabis spending in Canada peaked in the fourth quarter of 2017, at 161 million Canadian dollars, nearly a year before recreational marijuana sales started.

 

The most current statistics indicate that medicinal marijuana sales increased to CA$109 million during the second quarter of 2022 from a low of CA$104 million in the first. According to Brett Zettl, president and CEO of Zyus Life Sciences, a medical marijuana business based in Saskatoon, Saskatchewan, which is getting ready to go public through a reverse takeover, patients are currently just giving up and buying stuff from an adult-use store.

 

Canada was the first significant economy in the world to federally legalize recreational marijuana use. But established marijuana markets in the US, like Colorado, have shown a similar tendency, with medical markets contracting after recreational legalization.

 

If Germany implements its proposal to legalize adult use, these tendencies make it uncertain if the country’s largest cannabis market in Europe will experience a similar medicinal market drop.

 

According to Deepak Anand, a top executive of the charitable advocacy group Medical Cannabis Canada and a consultant on cannabis laws for several international governments, some Germans purchase medical marijuana out of their own pockets, and that segment of the market stands to be impacted by the legalization of adult use.

 

Anand said that the public health system reimburses about 40% of all German medicinal marijuana prescriptions.

 

“I don’t think the pattern that we’ve seen in legal markets—where, basically, after recreational legalization, we see medicinal sales have declined—will necessarily continue in Germany,” Anand added.

 

THE INCONVENIENCE FACTOR

 

To obtain dried marijuana, oils, edibles, or topicals through the government’s system, Canadians need a prescription from a doctor or nurse practitioner. This allows people to purchase marijuana straight from licensed dealers for mail delivery.

 

Both growing medical marijuana at home and purchasing it from a certified grower are acceptable.

 

As of the end of 2021, just 42,000 people were producing medical marijuana for personal use or others, according to Health Canada.

 

Comparatively, over 257,000 people registered to purchase cannabis from a commercial grower.

 

Zettl, a veteran participant in Canada’s regulated MMJ market, suggests that several causes could account for the market’s fall since its 2017 peak.  Zettl stated that the Canadian medical cannabis patient group contained both “genuine medicinal users” and some casual users before the legalization of recreational use in October 2018.  They would attempt to obtain it legally while continuing to take it recreationally, according to Zettl.

 

Now, he claimed, purchasing marijuana at an adult-use store is easier than utilizing the legal medical marijuana system.

 

Zettl also thinks that doctors might be reluctant to waste hours filling out medical marijuana permission paperwork and that medical-certification agencies may audit doctors who approve cannabis for an excessive number of patients.

 

People simply don’t want the inconvenience element, according to Zettl. The hassle aspect is not desired by the doctors.

 

Following the legalization of cannabis for adult use, new cannabis products, such as edibles, entered the market. However, medical cannabis products are still subject to the same laws as recreational cannabis, including THC limitations on goods like edibles.

 

Anand said that it would be incorrect to hold recreational and medical marijuana to equal standards, concerning imposing limitations for high THC, for example.

 

He contends that due to Canada’s preoccupation with legalizing marijuana for recreational use, not just have patients been overlooked, but also regulating policy has been disregarded to a significant degree.”

 

The patient is going to the illegal market to be able to acquire their products, as we observed and are still experiencing, he continued.

 

Another historical obstacle for the medical market was the cost of cannabis, according to Anand.  That has improved since recreational use was legalized.

 

Although it does allow registered patients to deduct medical marijuana costs on their yearly tax returns, Canada does not provide registered medical cannabis users with any special tax treatment.

 

Patients who purchase medical marijuana pay retail taxes, just like they would at a store selling recreational goods, and growers pay the same excise taxes as those on cannabis for adult use.

 

Anand stated that it simply doesn’t make sense since, in Canada, there is no tax on any other medicinal products.

 

GAINING GROUND ONCE MORE

 

To get Canada’s medical marijuana business thriving once more, Anand advocated for legislative changes.

 

It should be done right away, he argued, to permit pharmacists to administer medical cannabis.  We should also immediately remove taxes and potency restrictions.

 

The Canadian cannabis sector is hoping for changes to the federal Cannabis Act, which is presently being reviewed.

 

One of the key subjects for the review, according to the government, is the effect of regulation and legalization of cannabis on accessibility to marijuana for medical purposes.

 

According to Zyus’ Zettl, the government is utilizing “this recreational-style statute to control and regulate the medical side – and it’s coming at a great disservice for the medicinal usage, on both the doctors’ side and the patient side.

 

Zettl stated that Zyus is creating three cannabis drug-product candidates to expand the country’s medicinal marijuana industry and anticipates eventually obtaining official Drug Identification Numbers (DINs) from Health Canada.

 

Because they could be included in insurance companies’ formularies for prescription drugs and doctors could recommend them without worrying about being scrutinized by regulators.

 

Zettl acknowledged the long-term nature of obtaining DINs for herbal cannabis products.

 

Therefore, medical marijuana must, in the interim, find methods to appeal to those who are really, honestly utilizing it for medical purposes and offer them a reason to continue using it rather than giving up and only purchasing it (from recreational businesses).

 

BOTTOM LINE

Other countries looking to make recreational cannabis legal at the federal level can take a look at what the move did to the Canadian cannabis market and work on policies and regulations that will be better for the country before legalization takes place.

 

COUNTRIES LEGALIZING WEED, READ ON…

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Don’t Miss! New York Retail Dispensary Guidelines: What Every CAURD Applicant Needs to Know

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Date: December 7th, 2022

Time: 2 – 3pm EST


New York recently released its adult-use cannabis retail dispensary guidelines and there is a lot to unpack. We will likely see additional changes to New York’s rules and regulations, but the released guidelines provide a robust initial framework for applicants (past and future) to follow.

Join Harris Bricken’s lead New York cannabis attorneys, Simon Malinowski and Matthew Schwartz as they analyze the recently released regulations.

Simon and Matt will cover operating requirements, employee training, and marketing rules, among many other topics covered in New York’s retail dispensary guidelines.


Check out some of our past Canna Law Blog posts on New York’s cannabis regulation updates:

  1. BREAKING: NY Federal Judge Blocks CAURD Licensing in Five Regions
  2. New York’s Cannabis Retail Dispensary Regulations Are Here!
  3. New York’s Cannabis Retail Dispensary Regulations, Part 1: Dispensary Operations



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CBD is Coming to Your Dentist’s Office

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The Therapeutic Benefits of CBD for Dentistry and Oral Health

 

Cannabidiol (CBD) is among the most important compounds in marijuana.

 

CBD products are typically derived from hemp plants, which contain only trace amounts of THC, the psychoactive compound in marijuana which causes a high. CBD has numerous valuable applications in medicine, with the potential of its use in various medical fields growing each year thanks to an increasing body of research.

 

CBD works with the endocannabinoid system, which features receptors all over the body. It’s widely used for treating anxiety, pain, epilepsy, and many other illnesses with little to no side effects.

 

Many dentists these days, aside from doctors, are seeing the potential of using CBD in their field. In fact, there are even specific CBD products developed for oral health, such as toothpastes, mouthwash, mouth sprays, and creams.

 

Dental Applications of CBD

 

There are several ways CBD can be used in dentistry. These include:

 

  • Post-operative inflammation: Studies show that CBD has powerful anti-inflammatory properties. Because of this, dentists may be able to prescribe CBD to reduce the inflammation experienced by patients following oral surgery, root canals, and other procedures.

 

  • Dental pain: CBD has potent pain-relieving properties, making it a safer, natural alternative to pharmaceutical drugs when it comes to dental pain. Patients may be able to take CBD products to minimize pain before or after certain procedures. Conventional painkillers such as opiates are addictive and cause side effects to patients, while CBD is free of these unwanted side effects.

 

  • Better sleep: Oral discomfort due to problems and procedures in your teeth and gums can make it difficult to fall asleep. However, proper rest is essential for healing any conditions no matter where in the body. CBD has been known as an effective sleep aid, making it easier for patients to get much-needed sleep following a procedure that may still leave them in discomfort for days after.

 


CBD For Oral Health

 

The vast array of CBD’s therapeutic benefits can help individuals improve overall oral health, reducing the need to visit the dentist for treatments.

 

In a 2020 study by Belgian researchers, they found that cannabinoids were more effective in eliminating the quantity of bacteria that causes dental plaque, when compared to conventional and established oral products like Colgate and Oral B. They followed it up with another study, which revealed that cannabinoid-infused mouthwashes with both CBD and CBG were just as effective when compared to 0.2% chlorhexidine mouthwashes for the reduction of dental plaque.

 

These findings are significant because chlorhexidine mouthwashes have long been considered as the most effective when it comes to reducing plaque.

 

However, looking deeper, chlorhexidine does have some side effects. These include possible staining of tooth restorations and surfaces, allergic reactions, light-headedness, mouth sores, gingivitis, tartar, throat and mouth irritation, tongue swelling, change in taste, unpleasant taste, mouth ulcers, and much more.

 

Other benefits of CBD for oral health include:

 

  • Treatment of TMJ: TMJ (temporomandibular joint) disorder is characterized by tenderness or pain along the jaw, in one or both temporomandibular joints. This joint connects the skull to the jaw, which is why it can result in serious discomfort in this part of the head. It can also cause severe pain in and around the ear, difficulty chewing, facial pain, and lock jaw. Conventional treatments for TMJ include pain relievers, antidepressants, and muscle relaxants.

 

Without effective treatment, some patients may even experience total jaw displacement and chronic pain. However, studies have shown that CBD can be effective in treating the symptoms of TMJ in patients.

 

  • Prevent tooth decay: Too much bacteria in the mouth produces plaque acids, especially after eating sugar or starches. These bacteria, called Streptococcus mutans, causes enamel erosion and thus, gives you cavities. When cavities grow bigger, it makes it easier for other harmful bacteria to reach deeper in the mouth and cause infections.

 

As proven by the study by researchers in Belgium, CBD is just as effective as conventional dental care products in protecting your teeth. It can keep your mouth free of the harmful bacteria while ensuring the healthy bacteria still thrive, protecting both your teeth and your gums for healthy oral health.

 

  • Prevent gum disease: Poor oral hygiene is the number one cause of gum disease. However, genetics can also play a role. Regardless of the cause, gum disease can cause irritation and inflammation in the gums and eventually lead to gingivitis. When gingivitis isn’t addressed, it can evolve to a more serious condition called periodontitis, which compromises the tooth as well as the bone that holds it in place.

 

Consuming CBD-infused oral health products can prevent inflammation and reduce the damage caused by gum disease.

 

Precautions

 

Just like with other medications, CBD should be used with caution (or avoided altogether) if you are taking prescription drugs. The same is true for anesthesia, since CBD users may need more anesthesia for it to work, especially if it contains epinephrine. Patients who consume CBD (and THC) regularly should always inform their doctor ahead of time. You may be asked to abstain from consumption 2 days before surgery.

 

Conclusion

 

More research would certainly be beneficial for backing up the efficacy and safe use of CBD in dentistry. It already clearly has so much potential helping both dentists and patients especially for alleviating anxiety, inflammation, and pain. We expect to see more dental-specific products developed over the next few years to help countless people improve oral health safely with the help of CBD.

 

Last but not least, CBD should not be seen as a dental cure-all: it’s still important to maintain proper oral hygiene, brush your teeth, and floss regularly.

 

CANNABIS AT THE DENTIST, READ ON…

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