The average wholesale price for a gram of medical cannabis leaf in Pennsylvania has fallen 36% since the beginning of 2020. But the average retail price that patients pay is down only 14% over the same period, a state official said Tuesday.
That discrepancy "is a red flag that needs to be investigated," the outgoing director of the state's Office of Medical Marijuana, John Collins, said during an online meeting of the Pennsylvania Medical Marijuana Advisory Board.
The average wholesale price of a gram of weed fell to $6.56 in February from $10.19 at the beginning of 2020. At retail, the average price fell to $13.40 per gram from $15.67 per gram. Historically, Pennsylvania has had some of the nation's highest prices for medical marijuana.
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Collins explained that the Pennsylvania Department of Health, which regulates medical cannabis, can do very little about the fact that retail prices haven't dropped as much as wholesale prices. It's not unusual in many industries for wholesale and retail prices not to move in lockstep.
"We can't particularly force a price point," Collins said. "Dispensaries take title to the product and have the right to price it. What we can do to encourage more competition is to put a spotlight on it like we're doing today."
Patient advocates have long pushed Collins, who is retiring at the end of this month, and the department to do something about "excessive pricing," according to Jeff Riedy, executive director of the Lehigh Valley chapter of the National Organization for the Reform of Marijuana Laws.
"Director Collins' acknowledgement of pricing inequities exemplifies that industry players are concerned more about profits and less about helping our 400K active patients," Riedy said in an email.
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The state health department has legal authority to cap prices, but has not done so. Both Collins and Luke Schultz, a medical marijuana patient on the marijuana advisory board, said the options are either unsustainable or problematic because companies would likely all raise prices to a cap.
Because cannabis is illegal under federal law, insurance doesn't cover it. That makes it an out-of-pocket expense for patients. The medical marijuana board meets several times a year. Among its responsibilities is considering which medical conditions to approve for the program.
Meredith Buettner, executive director of the Pennsylvania Cannabis Coalition, a trade group, said the remarks by Collins "fail to recognize the regulatory reality of operating in Pennsylvania."
Buettner blamed Pennsylvania's relatively high prices on duplicative product testing requirements, the inability of Pennsylvania operations to remediate contaminated cannabis into a something else they can sell, and other factors.
