Cannabis is Facing an Inflationary Buzz Kill

Most survey respondents say they are prepared to buy less if inflation persists.

While inflation took more time to come for alcohol and cannabis products, it is slowly creeping in.

One in every four retailers across the country recently said they either raised or plan to raise weed prices by more than 10% in the next year.

That is still well below many foods that people consume every day — recent numbers from the Bureau of Labor Statistics reported prices spikes of 47% for eggs and 26% for butter. But it’s still enough to make some seriously rethink how often they buy.

According to a recent survey of 1,450 American adults by cannabis research firm CBD Oracle, 54% would buy less cannabis if inflation keeps getting worse.

Inflation May Push Some To Light Up Less

Out of those 54%, 41.9% said they would buy somewhat less while 12.3% are prepared to buy a lot less. 83% of those who use cannabis said they would be willing to pay $30 for an eighth of an ounce (3.5 grams) but only 57% would pay $40.

At the time the survey was taken, 42% said they were consuming the same amount of cannabis as last year. A further 35% even said they bought a little more or a lot more.

Out of those who bought less, 27.9% did so because of inflation while 29% were looking to change health or lifestyle habits.

Naturally, all of this applies only to states where marijuana use is presently legal.

“Our survey suggests there are tough times ahead for the cannabis industry,” CBD Oracle Chief Research Officer Mark Mellone said in a statement. “Inflation is making it difficult to remain profitable, but with customers feeling the pinch too, any price increases will make some rethink their purchasing habits.”

Alternative Sources for Cannabis

But as numbers show again and again, people tend to scrounge up money for certain favorite vices. In the survey, 29% of respondents said they’d navigate inflation by buying weed in bulk while 27.3% would look for cheaper cannabis — which could mean anything from picking less expensive products at the dispensary to finding cheaper options that may not be legal.

Another 18% said they would try to grow their own weed at home while 16.7% of survey respondents said that they would use cheaper marijuana alternatives like CBD or delta-8 THC.

“The data has suggested that people have some – understandable – resistance to reducing the amount of weed they use, but that rising prices would cause issues for some,” write the survey’s authors. “The question then naturally comes, if you can’t save enough by doing things like buying in bulk or growing your own, what would you give up in favor of cannabis?”

The very idea of “cutting back” can mean very different things to people of different social backgrounds — for some, that may mean taking one fewer international trip a year to buying fewer and cheaper groceries.

A recent study from insurance company Breeze found that inflation pushed 73% of U.S. households to cut back on restaurants and takeout while a respective 57% and 44% spent less on groceries and gas.

As with many other things, rising weed prices are more likely to hit people in lower-income brackets harder — those who are more comfortable financially are less likely to change habits in this area compared to any other.

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This story was originally published September 15, 2022 3:20 PM.