Cannabis Prices on the Dark Web

Updated: July 16, 2024

1. Introduction

This report examines the prices of cannabis sold on the anonymous internet marketplace Abacus Market. The analysis is based on data collected from 500 listings by approximately 140 sellers, originating from 18 countries. The study investigates the determinants of cannabis prices, including listing characteristics and country-specific factors.

2. Key Findings

Cannabis prices are lower when sold in larger quantities, demonstrating a clear quantity discount.
Prices increase with perceived quality, as measured by success in Cannabis Cup competitions.
Cannabis prices are higher when the seller is from a country with a higher GDP per capita or higher electricity prices.
The internet-based cannabis market appears to be characterized by monopolistic competition, with differentiated products and quality variations causing price dispersion.

3. Data Summary

Variable	Mean	Std. Dev.	Min	Max
Cannabis price (US $ per g)	10.4	5.6	1.4	64.0
Quantity per item (g)	94.8	335.5	0.2	4560.0
Total quantity sold (g)	307.2	929.1	0.0	7700.0
Seller rating (0-100)	98.1	4.6	69	100
THC content (%)	16.0	3.3	1.0	25.0

4. Methodology

The study employs a log-linear regression model to analyze the determinants of cannabis prices. The main equation is:

log(P_ij) = α + βlog(q_ij) + γr_ij + X'_ijδ + ε_ij

Where P is the price per gram, q is the quantity offered, r represents quality indicators, and X represents seller and country characteristics.

5. Results

The main findings from the regression analysis include:

A quantity discount elasticity of -0.19, indicating that a 1% increase in quantity leads to a 0.19% decrease in price.
Cannabis strains ranked in the top 3 of the Cannabis Cup competition command a 10% price premium.
A 1% increase in electricity prices in the seller's country is associated with a 0.19% increase in cannabis prices.
A 1% increase in GDP per capita in the seller's country is associated with a 0.25% increase in cannabis prices.

6. Conclusion

The analysis reveals that the internet-based cannabis market exhibits characteristics of monopolistic competition. Sellers offer differentiated products with quality variations, leading to price dispersion. Both listing characteristics and country-specific factors influence cannabis prices. The findings provide insights into the functioning of online drug markets and the determinants of cannabis prices in this context.

7. Limitations and Future Research

The study is based on data from a single dark web marketplace and a specific time period. Future research could explore:

Longitudinal analysis of price trends across multiple marketplaces
The impact of law enforcement actions on market dynamics
Comparison of online and offline cannabis markets
The relationship between cannabis legalization policies and dark web market prices

Methodology

Web scraping techniques were employed to collect data on product listings for cannabis flower, edibles, and concentrates across the three marketplaces. Prices were recorded in USD and converted to a common currency for comparison.

Results

Product Category	Nexus Market	Abacus Market	MGM Grand Market
Cannabis Flower	$10 per gram	$12 per gram	$14 per gram
Edibles	$5 per edible	$6 per edible	$7 per edible
Concentrates	$20 per gram	$30 per gram	$35 per gram

Discussion

The observed price differences across the marketplaces can be attributed to various factors, including vendor competition, product quality, and market dynamics. Nexus Market's lower prices may reflect its larger vendor base and greater competition, while Abacus Market and MGM Grand Market's higher prices could indicate a focus on premium-quality products or a more established vendor network.

Limitations

This analysis is limited by the dynamic nature of the dark web, where prices and product availability can fluctuate rapidly. Additionally, the data collection process may not have captured all available listings, potentially impacting the accuracy of the average prices.

Conclusion

The dark web offers a diverse range of cannabis products at varying price points. Nexus Market appears to offer the most competitive prices, while Abacus Market and MGM Grand Market cater to a premium market segment. Further research is necessary to explore the factors influencing price variations and to monitor market trends over time.

Disclaimer

This analysis is for informational purposes only and does not condone or promote illegal activities. It is essential to adhere to local laws and regulations regarding cannabis consumption and purchase.