Where US Cannabis Prices Are Headed Through 2031

August 15, 2026

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The US Cannabis Spot Index closed at $1,015 per pound on April 3, 2026. That figure is down 6.8% since the start of the year, but it's also up meaningfully from the $888 floor the index hit in January 2025 -- a low that, at the time, looked like it might keep sliding toward four figures becoming a memory. Instead prices bounced, then resumed drifting down. That's not a contradiction; it's what a maturing commodity market looks like when nobody's quite sure yet where the bottom actually is.

Here's the tension that actually matters to anyone running a cultivation facility, a dispensary, or a portfolio with cannabis exposure: unit sales are up 5.5% year over year, while dollar sales are up just 0.8%. People are buying more cannabis. They're spending almost the same amount of money to do it. That gap -- five and a half points of volume growth against less than one point of revenue growth -- is the entire story of the US cannabis market in 2026, and it's going to keep being the story for a while.

What follows separates three different kinds of claims, because conflating them is how industry forecasting usually goes wrong. Some of this is already-recorded fact: spot prices, state-level averages, tax rates that have taken effect. Some of it is extrapolation -- reading Colorado's and Michigan's price curves as templates for where newer markets are headed, the way economists read adoption curves in any commodity that goes from scarce and illegal to abundant and regulated. And some of it is a genuine wildcard, the kind where reasonable people looking at the same evidence land in different places: a federal rescheduling decision that's been working through the DEA's administrative process for most of 2026, with resolution expected late this year or early next, but no hard deadline forcing anyone's hand.

The Price Map Right Now: A Tale of Two Market Ages

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Two numbers tell you almost everything about how differently priced two legal cannabis markets can be in the same country under the same federal prohibition. In Michigan, the June 2026 CRA Monthly Report put average flower prices at $58.18 an ounce -- call it $2.05 a gram. In New York, the average price per item in February 2026 was $31.29, itself down from $35.41 a year earlier. New York is getting cheaper. It is still one of the most expensive legal markets in the country, and it isn't close.

Nationally, the average product price across all categories sat at $15.91 in June 2026, and packaged flower specifically fell 5.7% per gram year over year. That's a broad, market-wide decline, not something isolated to one state or one product category. Retailers know it, too -- the average discount off shelf price climbed from 22.8% to 26.0% of shelf value over the same stretch, which is a fairly direct signal that operators are discounting harder to move inventory rather than sitting on it and waiting for better days. When discounting depth increases at the same time headline prices are falling, you're looking at a market actively working through oversupply, not one where sticker prices happen to have drifted down for unrelated reasons.

The instinct is to explain the Michigan-New York gap with quality, or brand maturity, or consumer sophistication. That's mostly wrong, or at least it's not the primary driver. The better explanation is market age and license count. Michigan legalized recreational sales in December 2019 and issued licenses aggressively from the start, building toward the kind of cultivation oversupply that inevitably drags price down. New York didn't open its first legal adult-use dispensary until December 2022, and its licensing rollout was slow and litigation-heavy for its first two years, which kept supply artificially tight relative to demand. A market's price level, in other words, is substantially a function of how long regulators have been saying yes to new licenses and how many times they've said it -- not some inherent difference in the cannabis itself. That's a pattern worth holding onto, because it's the same lens that explains almost every other price gap between states discussed below.

Why Prices Keep Falling: Oversupply Meets a Market That's Still Mostly Illegal

In 2026, retail flower pricing varies widely by market and unit: Michigan averages about $2.05 per gram, while New York's average item price ($31.29) far exceeds both Michigan's per-gram rate and the national average product price of $15.91.

Headset tracked $24.3 billion in dispensary sales across 16 tracked state markets in the 12 months ending June 2026. Whitney Economics, extrapolating out to the full national legal market including states outside that tracked panel, forecasts $30.5 billion in total US legal cannabis revenue for all of 2026. Those are the legal numbers, and they sound like a real industry. But Whitney Economics also estimates that roughly 75% of total US cannabis consumption still happens outside the legal market entirely -- untaxed, unregulated, and priced without any of the compliance costs legal operators carry. Every legal cultivator and retailer in the country is competing against a shadow market roughly three times its own size.

That illicit-market overhang is the structural reason unit sales rose 5.5% while dollar sales rose only 0.8% over the same period. Falling per-unit prices are absorbing almost the entire increase in demand. More people are buying legal cannabis, which is the good news; they're paying less per gram to do it, which is the flip side, and it means top-line revenue for the industry barely moves even as the customer base and purchase frequency grow. This is a demand story and a supply story happening at the same time, and the supply side -- cultivation capacity built well ahead of what any single state's legal demand can absorb -- is currently winning.

Colorado is the cleanest historical template for where this goes, because it's the market that's run the experiment longest. Wholesale flower there traded above $9 a gram in the early years of legal recreational sales, when licenses were scarce and cultivation infrastructure hadn't caught up to demand. Today it trades around $3 a gram. That's not a temporary dip; it's roughly a decade of steady compression as licensing expanded, cultivation techniques improved yields, and the market found its clearing price. Michigan basically ran the same experiment on a faster timeline and arrived somewhere similar. The reasonable extrapolation -- and it is an extrapolation, not a certainty -- is that newer, more restrictive markets like New York, Illinois, Virginia, and DC are earlier on that same curve. They still have meaningful room to fall as their own licensing catches up to their own demand, the same way Michigan's and Colorado's did before them.

Michigan's Tax Experiment: Can Policy Put a Floor Under Prices?

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Michigan's new wholesale cannabis tax took effect January 1, 2026, at 24% -- a substantial levy layered directly onto a market that was already oversupplied and already the cheapest in the country on a per-gram basis. It's a useful natural experiment, because it tests a specific economic proposition: does raising input costs on cultivators reliably show up as higher shelf prices, even in a market where years of price data have pointed in exactly one direction?

Historically, the answer leans yes. Cost increases imposed on producers in commodity-like markets tend to get passed downstream to the next link in the chain, especially when the tax applies market-wide rather than to one competitor selectively -- everyone's costs go up together, so nobody's forced to eat the increase alone to stay competitive within the state. On that logic, a modest per-gram price increase in Michigan over the next 12 to 18 months is a plausible, reasoned bet. If it happens, it would be a genuine reversal worth flagging: a mature market where the price signal has been one-directional for years suddenly finding a policy-driven floor instead of a market-driven one.

The counter-case deserves equal weight, though, because it rests on the same economic logic pointed a different direction. Michigan cultivators aren't just competing with each other -- they're competing with a national wholesale market and, at the margins, with neighboring states' lower-cost product finding its way into interstate commerce through gray channels, plus the illicit market discussed above. If Michigan operators judge that passing the tax through to price would push them out of range of what price-sensitive customers will pay, or out of range of illicit-market alternatives, the more likely outcome is margin compression rather than price increases: cultivators absorb the tax, profitability thins further, and shelf prices stay roughly where the oversupply already had them. Given how thin margins already run in Michigan's flower segment, this isn't a fringe scenario -- it's arguably the more likely one in the short term, even if it's less sustainable for operators over a longer horizon.

Either way, other states are watching. If Michigan's tax does put a floor under prices without crushing operator viability, expect other oversupplied markets to reach for wholesale taxation as a deliberate policy tool for managing price collapse -- a more direct lever than the slower, blunter instrument of capping new licenses.

The Rescheduling Wildcard

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On April 23, 2026, Acting Attorney General Todd Blanche ordered marijuana moved from Schedule I to Schedule III, but only for two narrow categories: FDA-approved drug products and state-licensed medical marijuana programs. That's a real, documented action -- but it's considerably narrower than the full rescheduling the industry has been anticipating since the DEA's rulemaking process began under the prior administration, and it left the broader recreational and adult-use question unresolved.

That broader question got its hearing between June 29 and July 15, 2026 (with a recess starting July 3), presided over by DEA Chief Administrative Law Judge Derek Julius. One procedural detail from that hearing is worth sitting with: the DEA selected only seven anti-rescheduling parties to participate as designated participants, and notably rejected pro-rescheduling trade associations from formal participation in the proceeding. That's not proof of an outcome, but it's a signal -- an agency that controls who gets standing in its own hearing and skews that selection toward opponents of a policy change is not an agency that appears eager to reach that change quickly or easily.

Post-hearing briefs are due August 17, 2026. After that, Judge Julius will write a recommendation, and the DEA Administrator makes the actual final call -- with no statutory deadline binding either step. Analysts polled on timing tend to peg resolution at late 2026 or early 2027, but it's worth noting plainly that the process has already run considerably longer than most industry observers expected when it began, which is itself a reason for caution about any specific date anyone offers you.

Here's the piece that gets lost in a lot of rescheduling coverage: full rescheduling to Schedule III would not directly lower wholesale cannabis prices. Cannabis would still be regulated, still subject to state licensing and taxation, and still competing against the same oversupply and the same illicit market described above. The mechanism that actually changes is IRC Section 280E, the federal tax code provision that currently bars plant-touching cannabis businesses from deducting ordinary business expenses -- rent, payroll, marketing -- the way any other legal company can. Removing that bar doesn't change what a customer pays at the register. It changes what an operator gets to keep after taxes, which is a real and substantial shift in company economics, but a different one than the price-per-gram story this piece is mostly about.

What Five Years Actually Looks Like: Two Scenarios

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Put the pieces together and five years out looks less like one national trend line and more like two curves converging from opposite directions. Call the base case the extrapolation from Colorado's and Michigan's maturity curves: continued net national price decline through roughly 2028-2029, with the bulk of that decline concentrated in newer, still-restrictive markets -- New York, Illinois, Virginia, DC -- doing most of the actual falling as their licensing catches up to demand the way Michigan's did. Mature markets like Michigan and Oregon, on this read, mostly flatten out, and Michigan specifically may tick up slightly if its wholesale tax pass-through plays out the way Section 3 laid out as the historically-favored outcome.

Layer the rescheduling wildcard on top of that base case rather than as a replacement for it. If full rescheduling clears in early-to-mid 2027 -- itself an uncertain if, given how the DEA hearing has already run past initial expectations -- the more likely near-term effect is improved operator margins well before it shows up in retail prices. There's a real precedent for that sequencing: when other regulated industries have received comparable deduction relief or tax-structure changes, companies have tended to use the resulting cash first to pay down existing debt and fund expansion, and only later, once competitive pressure builds among better-capitalized rivals, does that relief show up as lower prices for the end customer. Expect cannabis operators to follow roughly that same order of operations.

The wildcard inside the wildcard is that illicit-market share, currently estimated at roughly 75% of total US consumption per Whitney Economics. If legal prices keep falling enough to actually undercut street prices in a given state -- which is plausible in mature, oversupplied markets like Michigan and Colorado where legal flower is already cheap -- that 75% figure could shrink meaningfully, pulling real new demand into the legal column. If state and local taxes stay high enough to keep legal shelf prices above street prices regardless of what happens with 280E federally, that gap could persist stubbornly no matter what the DEA decides.

What would it take for national prices to actually reverse upward instead of continuing to compress? Realistically: a hard supply-side shock like coordinated license moratoriums across several states at once, an aggressive spread of Michigan-style wholesale taxation adopted broadly rather than as one state's experiment, or a demand surge that outpaces cultivation capacity faster than growers can respond. None of those currently has strong supporting evidence behind it -- moratoriums are politically difficult once licenses are already issued, tax copying takes years to spread state to state, and cultivation capacity in the US has consistently outrun demand rather than lagged it. The more conservative read, and probably the more honest one, is that with three-quarters of consumption still happening outside legal channels, legal-market price data may actually be understating how much further prices have left to fall before hitting a genuine market-clearing level against the illicit market it's still competing against.

Strip away the state-by-state noise and the five-year outlook really is two stories running at once, not one. Young markets are falling toward the Colorado-and-Michigan-style floor that oversupply and licensing maturity have already carved out elsewhere. Mature markets are running the opposite experiment -- testing whether tax policy, deliberately applied, can hold a price floor in place after years of pure market-driven decline. Michigan is the live test case for that second story right now, and its outcome over the next 12 to 18 months will tell other states something concrete about whether wholesale taxation is a usable tool for managing price collapse, or just another cost that gets absorbed into already-thin margins.

On rescheduling: treat it as a balance-sheet story before it's a shelf-price story. Section 280E relief changes what cannabis companies get to keep, not what a customer hands over at the register, at least in the near term -- and the historical pattern from other industries that received comparable relief suggests operators spend that cash on debt and expansion first, competitive price cuts second. Anyone expecting rescheduling to show up as a sudden drop at the dispensary counter is reading the mechanism backward.

If there's one number worth tracking as closely as the spot index itself, it's Whitney Economics' illicit-market share estimate, sitting at roughly 75%. Legal cannabis prices have been falling for years now, but until that 75% figure actually starts moving, it's hard to call the current price compression a bottom. It looks more like a correction still working itself out against a shadow market three times the legal industry's size -- and corrections, unlike bottoms, don't announce themselves in advance.