When Davenport spoke to me 18 months ago (Wonkblog coverage here), retail marijuana prices had already fallen a stunning 58.5 percent. Yet he predicted correctly that the price collapse was not complete. The current retail price of $7.38 per gram (including tax) represents a 67 percent decrease in just three years of the legalization, with more decline likely in the future.

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Davenport expects the marijuana industry to continue to find ways to lower prices for the simple reason that it’s a profitable business model. “Some consumers will prefer higher priced brands, but there will always be a market for the brand that can produce adequate quality cannabis at the cheapest cost,” he notes.

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The ongoing decline in marijuana’s price after legalization has an important implication for drug policy more generally. The experience of Washington and other marijuana legalization states demonstrates how enormously effective prohibition of production and sale is at raising drug prices. For example heroin’s price took a decade to fall by 16 percent, which the legalization of marijuana accomplished in just eight months. Notably, even high taxes on legal marijuana don’t keep the legal price anywhere near what it was when the drug was more broadly illegal.