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It’s now been three years since Washington State legalized the sale of marijuana. So what happened? Answer: it got cheaper. The price of pot has fallen from $25 per gram to about $9 per gram, and it’s still dropping. Keith Humphreys comments:

Falling pot prices create winners and losers. Because state taxes are based on a percentage of the sales price, declining prices mean each sale puts less money in the public purse. On the other hand, bargain-basement prices undercut the black market, bringing the public reduced law enforcement costs, both in terms of tax dollars spent on jail and the damage done to individuals who are arrested. For consumers who enjoy pot occasionally while suffering no adverse effects from it, low prices will be a welcome but minor benefit….On the downside, young people tend to be price-sensitive consumers, and their use of inexpensive pot may rise over time, as might that of problematic marijuana users.

Are falling prices in Washington due to legalization? That seems like a reasonable guess. On the other hand, if the folks at priceofweed.com have things right, $9 per gram is roughly the market rate everywhere west of the Rockies. So there might be something else going on. Maybe legalization in Washington and Colorado have affected the entire regional market. Or maybe there’s been a bumper crop of pot in Mendocino County. It’s a little hard to say without more data.