What topics does this cannabis study cover?

This study covers research on: Addiction.

Where was this research published?

Published in Journal of cannabis research on June 6, 2026.

Addiction

When legal cannabis beats illicit prices in mature markets

High stakes: how legal cannabis pricing impacts the illicit market.

Journal of cannabis research • June 6, 2026 • Moderately Relevant

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AI Summary

This study examined pricing differences between legal regulated cannabis dispensaries and illicit markets across the United States from 2018-2024, revealing a complex relationship between market maturity and price competitiveness. Researchers analyzed crowdsourced price data from PriceofWeed.com alongside official state government pricing information from eight recreational states (Colorado, Oregon, California, Massachusetts, Michigan, Illinois, Maine, and Connecticut). The findings show that illicit cannabis was significantly cheaper in non-recreational states ($8.90/gram vs. $7.10/gram in recreational states), suggesting that the presence of legal markets does influence underground pricing behavior.

However, the price advantage between legal and illicit cannabis varies dramatically by state maturity and regulatory structure. In established markets like Colorado, California, and Michigan, legal cannabis was actually cheaper than illicit products, while in newer markets like Massachusetts, Illinois, Maine, and Connecticut, illicit cannabis maintained a price advantage. This pricing disparity is crucial because price is a major factor driving consumers toward illicit sources, which carry greater health risks due to lack of testing, quality control, and regulatory oversight. The research indicates that older recreational markets with more flexible licensing policies—allowing for greater competition among legal dispensaries—were better able to undercut illicit pricing.

The practical implication is clear: for legal cannabis markets to successfully displace the illicit trade, they must achieve both price competitiveness and market maturity through strategic licensing policies. States with rigid licensing restrictions that limit the number of dispensaries face higher legal prices that cannot compete with cheaper illicit alternatives, perpetuating the underground market. As the researchers conclude, establishing proper price benchmarks and flexible regulatory frameworks is essential for creating legal markets that are attractive to consumers and can effectively redirect cannabis commerce away from unregulated, potentially unsafe sources.

📄 Original Abstract

Although nearly 80% of Americans reside in a county with a legal, regulated cannabis dispensary, the majority of cannabis consumed in the U.S. is still obtained from unregulated, illicit sources. Illicit cannabis carries greater health risks and is generally less preferred than regulated cannabis, yet its lower price makes it attractive to many customers. However, comparative research on price differentials between the legal and illicit markets across states is scarce. Establishing cannabis price benchmarks is essential to ensure that legal markets are competitively priced and can effectively displace the illicit trade. We used crowdsourced data from PriceofWeed.com to estimate the cost of illicit cannabis in 2018-2024 and data from state government websites to estimate the cost of legal cannabis in Colorado, Oregon, California, Massachusetts, Michigan, Illinois, Maine, and Connecticut. We compared illicit prices by recreational dispensary status in all 50 states and D.C. and examined legal vs. illicit prices within the eight aforementioned recreational states. The median price per gram of illicit cannabis was significantly lower in recreational states, compared to non-recreational states ($7.10 vs. $8.90, p < 0.001). While illicit and legal prices were not significantly different over the entire study period, there were significant differences within years and within states. In Colorado, California, and Michigan, legal cannabis was significantly less expensive than illicit cannabis, while in Massachusetts, Illinois, Maine, and Connecticut, illicit cannabis was significantly less expensive than legal cannabis. We saw lower illicit market prices in states with recreational dispensaries. Our results suggest that the price ranking of legal versus illicit cannabis within a given state differs depending on the state's recreational market maturity, with states with older markets - all of which also had more flexible licensing policies - having a legal cannabis price advantage.