Three facts about marijuana prices*

Abstract

Australians are among the largest consumers of marijuana in the world, and estimates show that their expenditure on marijuana is approximately twice that on wine. In the present paper, the evolution of Australian marijuana prices over the last decade is analysed, and a decline in real terms by almost 40 per cent is shown. This decline is far above that experienced by most agricultural products. Why has this occurred and what are the implications? One possible reason is the adoption of hydroponic growing techniques that have enhanced productivity and lowered costs and prices. Another reason is that laws have become softer and penalties reduced. Patterns in prices are found that divide the country into three broad regions: (i) Sydney, where prices are highest; (ii) Melbourne and Canberra, which have somewhat lower prices; and (iii) everywhere else, where marijuana is cheapest. An exploratory analysis indicates the extent to which the price declines have stimulated marijuana consumption and inhibited the consumption of a substitute product, alcohol.

Yield and turnover of illicit indoor cannabis (Cannabis spp.) plantations in Belgium

“…In most studies on pricing mechanisms in drug markets or, more specifically, in local cannabis markets [13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29], analysis of pricing mechanisms is based on quantitative and qualitative data used or produced by the police and/or judicial authorities. However, the latter are often biased because: (i) police investigation methods can be based on stereotypes (certain types of suspects could be neglected since they do not match known types of suspects, whereby the former may use other pricing mechanisms than the stereotype suspects [18,[30][31][32][33][34]; (ii) changing priorities in public drug policies and in investigation by police result in unsystematically collected data [19,24,34]; (iii) information on drug prices in police data is mostly limited to the amount of drugs seized whereas the value of these drugs is always derived from interrogations of the arrested person [16] who often undervalues his crop to avoid higher sentences; (iv) police rarely takes the phenomenon of quantity discounting into account (i.e.…”

Cannabis prices and dynamics of cannabis use

“…The decline in the price of cannabis over the 1990s in Australia and the US provides a plausible explanation for why initiation is occurring at younger ages in these countries (Clements, 2004;Pacula et al, 2001). An alternative explanation is that cannabis use has become more socially acceptable over this period.…”

Demand for Marijuana, Alcohol and Tobacco: Participation, Levels of Consumption and Cross‐equation Correlations*

“…Issues relating to marijuana consumption are, to some extent, different from those of legal drugs. Although still an illicit drug in Australia, the consumption of marijuana among a significant proportion of Australians has persevered and the real price of marijuana has declined by almost 40 per cent over the past decade (Clements, 2004). The trend towards hydroponic cultivation has significantly increased productivity and product quality.…”