Nevada’s Cannabis Prices Rise 200% In One Month

A month into Nevada’s legal adult use marijuana sales and the product continues to fly off the shelves. Brayden Sutton, Chief Executive Officer of Friday Night Inc. said he has excessive back orders of recreational products waiting to be filled. His subsidiary called Alternative Medicine Association (AMA)  is currently recalculating its annual projections and how it can fill those increased needs.

While the initial problem has been the fact that there are only two distributors for the retails outlets, Friday night signed a deal with Blackbird logistics in order to do the physical deliveries themselves. “Right now the retail stores are really struggling keeping consistent product on the shelf and meeting demand,” said Sutton. “They are constrained by what cultivators can produce, which is nowhere near what they need to be right now.”

Sutton said if they can grow it or make it, it sells out immediately. AMA is constructing a state-of-the-art production facility that was planned to be ready to occupy this month and plans for additional cultivation and production are being formulated. Sutton said the price per pound for trim has gone from $150 to $450 in one month. “We still have healthy margins, but it’s a good indication of what the market has done,” said Sutton.

While many in the market expected demand to be strong, it has surpassed everyone’s expectations. The company has several brand agreements and with the demand for supply so strong, Sutton said he has to constantly prioritize who gets the limited product. The company had prdocution sales of $1.1 million in 2016 and projected sales of $5 million in 2017 and $20 million in 2018.

Ben Horner, Operations Manager of AMA also found that the flower demand is strong for pre-rolls. “Customers are mostly there for the weekend and they don’t need an ounce of weed. They also don’t want grinders and pipes. They want something easy and convenient and familiar,” he said.

As of May 10, Nevada had a total of 88 cultivation facilities and 57 production facilities. There are 60 dispensaries and 11 labs.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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