Regulatory Context and Public Health
Many states prohibit price promotions—discounts, coupons, loyalty programs—on cannabis deliveries to preserve public health and prevent youth-appeal. For instance, Massachusetts prohibits promotions for adult-use customers entirely, allowing only medical-patient relief in cases of financial hardship; the result: only about 4% of transactions include a discount, compared to 14–17% in other markets. These restrictions aim to prevent normalization, excessive consumption, and underage attraction.
Tax Integrity and Market Fairness
States impose significant excise taxes on cannabis products. Regulators worry discounting undermines tax compliance by reducing effective prices and obscuring true consumption levels. Many jurisdictions mandate that cannabis is sold at “fair market value” to ensure predictable tax revenues and guard against under-the-table deals. Allowing deep discounts on delivery could incentivize tax evasion and reduce transparency in tracking of taxable sales.
Consumer Protection and Impulse Buying
Price promotions often lead to impulse purchases or overconsumption—especially problematic with high-THC products. Research has documented non-compliance via price promotions and misleading marketing. Regulators use bans on promotions to temper such behaviors, aligning cannabis with regulated consumption standards similar to alcohol and tobacco. This approach aims to support responsible use and discourage heavy or unplanned consumption.
Illicit Market Encroachment
Licensed delivery services face steep costs—licensing, compliance, overhead—which drive their prices higher than illicit competitors. While discounting might seem like a tool to close the gap, states remain cautious. Instead, they address illicit activity through enforcement and regulation reform rather than blanket discount permissions. In New York, regulators are considering limited discounting for seniors, veterans, and students to help legal operators compete with black-market sellers; the proposal aims to balance public health with economic viability.
Operational and Compliance Challenges
Delivery operations must comply with complex advertising and promotional regulations, including age-targeting restrictions and disclosure requirements. States like Colorado impose strict rules preventing marketing that reaches audiences with more than 30% under-21. Allowing price promotions would further burden operators with monitoring, reporting, and targeting compliance—risks many regulators consider not worth the potential marketing benefit.
In Summary
States that prohibit price promotions on cannabis deliveries do so to uphold:
- Public health and safety, by curbing youth appeal and impulse consumption
- Tax fairness and market transparency, maintaining consistent revenue and value
- Consumer protection, avoiding misleading or excessive purchasing
- Market structure integrity, preventing illicit producers from gaining unfair advantage
- Regulatory simplicity, reducing complexity and enforcement burden
While some jurisdictions are experimenting with narrowly targeted discounts for specific social equity populations, the overarching regulatory philosophy remains cautious: price promotions can quickly undermine the framework of a tightly controlled, responsible industry.