In the Netherlands, the types of cannabis are to be sold at a lower price to the government by the producers. There is a shift observed in the cost price also, where it will now be €2.35 per gram instead of the on-going price of €5.80 per gram. The advantageous part of this change is that the selling price of cannabis will be brought down to way below the value in a coffee shop. It is outlined below as to why such a drastic step was taken and what are the results of the same.
Increase in medical usage of the product
One of the main reasons we could see the prices going down was to promote the medical usage of the plant. They hope that more recreational users utilize it for its medicinal properties rather than recreational. This is also with the aim that patients will refrain from self-medication and rely on a professional person’s advice for the right intake.
Increase in consuming population
The reason for the increase in the population is quite evident. According to government forecasts, a production capacity amounting to a contract value of €140m over a period of 6 years was noted. If the total users were totalling to this much in a span of six years, the consumption population will only rise more. As economics states, when the price goes down there is a rise observed in the demand.
Increase in requirements to be met whilst production
As compared to the factory-produced products, the new set of stipulations requires the product to be tested more. Companies must ensure that there is an adequate and equal quantity of THC/CBD in every flower. This must be checked to ensure a balanced content in the final product. With the help of this rule, both doctors and patients will be able to understand the level of content in each flower which was otherwise difficult to take a note of. They will also be able to ensure that both the contents and the dosage are the same.
But it will also take several harvests to reach the level of demand. Companies need to buck up in meeting the expectations of the consumer. New varieties of the product will take a lot of harvests to be able to produce a stable quantity and quality. Hence, companies will have to increase not just the outdoor growth of cannabis but also accelerate indoor growth.