After Colorado legalized possession, sale, etc. of marijuana, it was clear that both the supply curve and the demand curve would shift to the right.
But which would shift farther? Would the influx of visitors, coupled with increased purchases by domestic buyers lead to such a massive increase in demand that prices would rise? Or would the relatively easy production lead to a large increase in supply, causing the price to drop?
It turns out supply increased more than demand, despite "marijuana tourism" (see this).
[P]rices are declining faster than some had expected, while the number of people visiting the stores has increased. ...
Since last June, the average price of an 1/8th ounce of recreational cannabis has dropped from $50-$70 to $30-$45 currently; an ounce now sells for between $250 and $300 on average compared to $300-$400 last year. [emphasis in the original] More competition and expansion of grow facilities contributed to this price decline ...
According to the note, sales increased by 98 percent year-over-year in April....
Meanwhile, the popularity of legal weed has sparked a fast-growing industry that ... compares to Silicon Valley.