Pennsylvania’s Falling Wholesale Cannabis Prices Not Reflected at Dispensaries
Pennsylvania Department of Health

Pennsylvania’s Falling Wholesale Cannabis Prices Not Reflected at Dispensaries

The state’s medical cannabis program director calls out retailers for not passing wholesale savings on to customers.

March 24, 2022

Pennsylvania medical cannabis dispensaries have recorded record sales throughout the past 12-plus months, in part because retailers are getting more bang for their buck.

While wholesale dry-leaf cannabis prices dropped from $10.65 per gram in January 2021 to $6.65 in February 2022, representing a 37.6% decrease, retail cannabis prices dropped from $14.90 per gram to $13.40, or a 10.1% decrease, according to a Health Department presentation during the state’s Medical Marijuana Advisory Board (MMAB) March 22 meeting.

All the while, Pennsylvania dispensaries have recorded month-on-month sales increases throughout the past year, compared to every timeframe from the previous 12 months. For instance, December 2021 featured a record of more than $135 million in medical cannabis dispensary sales, while December 2020 sales were less than $100 million, according to the Health Department presentation.

In particular, the 37.6% decrease in wholesale prices compared the to 10.1% decreases in retail prices wasn’t adding up for John Collins, director of the Pennsylvania Office of Medical Marijuana, a position he’s held in the Health Department since August 2016. He plans to retire later this year.

While presenting the data during the advisory board meeting Tuesday, he called the trend “troubling” and said any savings in wholesale costs should be enjoyed by customers, The Tribune-Democrat reported.

“There is a significant opportunity to pass along savings to patients. Speaking for them, they should demand this be passed to them,” Collins said, adding that the advisory board should scrutinize why retail prices aren’t falling at the same rate as wholesale prices.

As of March 7, there were 156 medical cannabis dispensaries with product available in Pennsylvania.

Since commercial sales launched in April 2018, the state has recorded $4.8 billion in market sales, including $1.9 billion by growers/processors to dispensaries, and $2.9 billion from dispensaries to customers, according to the Health Department. There are currently 406,454 active patient certifications in the state.

The state’s advisory board works to ensure that Pennsylvania’s medical cannabis program provides patients with access to the latest treatments, and the body meets regularly to discuss patient care, patient safety and new research methods.

During the meeting on Tuesday, Collins said a red flag about the retail prices needs to be investigated while responding to a question from Health Secretary Keara Klinepeter, NPR-affiliate WSKG reported.  

“We’re seeing the evidence of a competitive market, but this is again illustrating a bit of a holdback on passing those savings along to patients,” Collins said.

His presentation also outlined retail market competition during the past couple years.

There were 77 operating dispensaries that combined for roughly $13 million in dry-leaf sales in January 2020 ($169,000 per dispensary on average), while 155 operating dispensaries combined for roughly $53 million in dry-leaf sales in February 2022 ($342,000 per dispensary on average).

While sales volume increased, the dry-leaf wholesale price trends continued to decrease at a faster rate than retail price trends during that time.

Higher prices at dispensaries force some patients to pursue the illicit market, Lehigh Valley NORML Executive Director Jeff Riedy told WSKG.

“We’ve been pressing the department for many years, obviously since the program began, that everything was priced out of the range of many patients,” Riedy said.