The state-legal marijuana market is generating tens of millions of dollars every quarter. It seems that in every state with either recreational or medical cannabis, sales continue to grow. That is not likely to change next year. In fact, a recently released survey indicates that consumers plan to spend even more on marijuana in 2025.

The survey in question was conducted by NuggMD, an online telehealth platform with a focus on medical cannabis. They asked their users about their cannabis spending habits over the past year, as well as what they anticipate for next year. Unsurprisingly, the majority of the respondents report spending more on marijuana with each passing near.

Spending Much More

Just over 270 consumers participated in the survey. Approximately 61% reported spending more on cannabis in 2024 as compared to the previous year. Just 22% said they are spending less while 16% reported spending about the same amount.

As for why the majority are spending more, there are several things in play. First are natural market forces. As demand for a given product goes up, so do retail prices. That’s the nature of our economy. However, market forces alone don’t tell the whole story.

Another important consideration is consumer appetite. NuggMD says people are spending more on marijuana because they want more of it. Not only that, but they are also willing to pay the price regardless of how high it goes. Assuming this to be true, it clearly explains why 45% of the respondents plan to spend even more on marijuana in 2025.

The Illicit Market Question

Whenever you talk about marijuana demand and pricing, you need to include the illicit market. The illicit market is alive and well across the country. Strangely, NuggMD released another survey this past August suggesting that upwards of 80% of all cannabis consumers purchase their product from state-licensed entities. I find that hard to believe.

California is the poster child for an illicit market that continues to dwarf the state-legal market. Even in Utah, where the state has established one of the strictest medical cannabis programs around, an estimated 60% of the product used in the state is purchased illicitly.

Consumers might report purchasing from state-licensed dispensaries at a rate of 80%, but that does not mean they are being truthful. A better indication of legal versus illicit sales are sales numbers themselves.

Prices, Regulations, and Taxes

So what actually drives cannabis prices at the retail level? Brigham City, Utah’s Beehive Farmacy says that supply and demand plays a role. But they say that regulations and taxes play an even bigger role.

Beehive Farmacy had to spend quite a bit to obtain its license. They continue to spend every time that license needs to be renewed. In addition, they pay taxes on all the products they sell. Growers and processors also pay taxes, but they pass the costs on to retailers. The retailers ultimately pass the costs on to consumers.

Getting back to California for a moment, the legal market has been begging state lawmakers for years to reduce taxes and regulatory costs so that they can compete with black market operators. Their pleas have fallen on largely deaf ears. As a result, licensed operators are struggling to hold on against illicit counterparts able to sell at rock bottom prices.

We Want More

State-legal and black market concerns aside, consumers appear ready to continue paying even more from marijuana in 2025. Apparently, we want more as a culture. Whether it is for medicinal or recreational use, we appear ready to pay whatever it costs to get it.