Will Rising Gas Prices Change the Price of Marijuana?

The rising price of gasoline is an unavoidable reality for millions of Americans today, and is already making many reconsider their daily routines and spending. With the average gas price rising well above $4 a gallon and rising, many are concerned that gas prices could lead to even greater economic fallout.

The recent import ban on Russian oil “increases the prospect of higher inflation in the near term while at the same time posing a threat economic growth and spending, and even reshaping attitude patterns,” according to the Washington Post. It is therefore understandable that many Americans are experiencing unprecedented levels of anxiety.

For those living in a state where cannabis is legal, marijuana therapy could be an option, but how long will Americans be able to afford it? Gasoline prices are skyrocketing and inflation hasn’t stopped. How will all of this affect the price of marijuana?

Photo by Krzysztof Hepner via Unsplash

RELATED: Despite inflation, cannabis prices are falling

First, it’s important to understand if there’s a strong connection between gasoline and growing marijuana. The answer is: occasionally. Since marijuana is still illegal at the federal level, marijuana must be grown and sold in the same states, meaning no cross-country trips in gas-guzzling diesel trucks, which is good news for cannabis users.

However, some marijuana growing techniques use oil and natural gas. Accordingly slate, some growers are “bottling CO2 or burning natural gas on site to basically get CO2 in the room,” spurring growth. This technique, and others that use the unnecessary consumption of fossil fuels, is frowned upon by environmentalists and is certainly not a requirement for growing quality cannabis.

There are several ways growers can use alternative energy sources, but they may not need to do it right away if price is their only motivation. While the cost of many goods is rising as a result of rising gas prices and inflation, marijuana prices are lower this year than they were last year. Accordingly a study of headseta cannabis analytics company that tracks sales in California, Colorado, Michigan, Nevada, Oregon, and Washington, the average price of flower, vapes, and edibles fell more than 10% between January 2021 and January 2022.

Photo by Karolina Grabowska from Pexels

There are several reasons for this price drop and many more speculations. Supply and demand are always a factor, as are wholesale prices, and of course, competition from the underground illicit cannabis market plays a role. However, just because the price of weed is low doesn’t mean the cannabis industry isn’t facing the same financial difficulties as other companies.

As is the case in many industries, the biggest financial and operational issue facing many cannabis CEOs today is staffing, and that issue is unlikely to improve with rising gas prices.

RELATED: Is the Cannabis Industry Inflation-Proof?

Native Roots, a cannabis company with 20 retail stores in Colorado, told CNN about their work struggles. “The biggest cost increases are at work, where Native Roots has increased wages by an average of 14% to keep up with the competition and retain employees.” after Theresa Ekman, Native Roots Supply Chain Director. Ekman and other companies said they are working to order smarter to offset increased labor costs. That can mean secure prices, but also less choice than consumers are used to.

At least for now, it looks like the price of cannabis is safe. You may notice a drop in options at your local pharmacy, but don’t take this as a lack of effort. This sparse selection of options may actually be the result of months of effort and forethought by cannabis companies to keep their best-selling cannabis products affordable during these stressful times.