Recreational marijuana sales have been legal in Washington State for about two years now, and during that time, the price of weed has plummeted. Down from a post-legalization high of about $25 per gram on the retail market, the same amount of pot now costs less than $10.
The economic explanation for this price drop is simple and predictable: The drug war makes the marijuana business dangerous and expensive because, as The Washington Post summarizes, black market drug sellers "must operate covertly, forgo advertising, pay higher wages to compensate for the risk of arrest, and lack recourse to civil courts for resolving contract disputes."
Once marijuana is legalized, these added costs of doing business disappear, making for a cheaper product and safer industry. Similarly, the Prohibition era of the 1920s and '30s caused the price of liquor to roughly triple before the Twenty-First Amendment, ending Prohibition, was passed in 1933.
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