A recent report from The Denver Post analyzes the fallout of the post-pandemic cannabis industry in Colorado. While once the state reached a peak of $226 million in combined recreational and medical cannabis sales, current sales have decreased and small businesses struggle to stay afloat.
“The market’s just bad. It’s bad right now,” cannabis salesperson Val Tonazzi told The Denver Post. “There’s businesses closing, left and right.”
In February, Colorado’s medical cannabis sales decreased to $15 million, the lowest collection since retail sales began in 2014. March brought a slight increase in medical cannabis sales, approximately $17 million, but was $5 million less than March 2022. Likewise, March recreational sales were recorded at $122 million this year, but it’s a $17 million decrease from last year’s numbers.
On May 9, the U.S. Department of Health and Human Services announced a fact sheet detailing the “End of the COVID-19 Public Health Emergency.” While the nation and many of its industries return to normal operations, cannabis business owners continue to see ripples of oversupply of cannabis products, lack of demand, pricing dropping to record lows, and lack of cannabis tourism.
Over the past few years, many states bordering Colorado have approved recreational cannabis. This includes Montana and Arizona in 2020, and New Mexico in 2021, creating competition for Colorado.
Vangst, a cannabis job company, recently released its 2023 Vangst Jobs Report. The report states that there was a 2% drop in cannabis jobs, and Colorado was ranked as the second highest state for cannabis job losses. It was also ranked number six on a list of top cannabis jobs with less positions than states like California, Michigan, Illinois, Florida, and Massachusetts.
It isn’t just small cannabis businesses falling under hard times. Bigger companies, like Curaleaf, are also pivoting as well. In January, Curaleaf closed down its offices in Colorado, California and Oregon, “as part of its continued effort to streamline its business.” According to Curaleaf CEO Matt Darin, this move was also made due to thriving black market competition. “We believe these states will represent opportunities in the future, but the current price compression caused by a lack of meaningful enforcement of the illicit market prevent us from generating an acceptable return on our investments,” Darin said in a press release.
The closure of cannabis businesses is affecting the real estate market as well. A National Association of Realtors report recently explained “a decline in commercial property purchases by marijuana industry-related businesses and a corresponding increase in leasing activity.”
The Denver Post spoke with local entrepreneur Renée Grossman, who founded five retail storefronts in Colorado since 2013, and also moved into cultivation and manufacturing as well. “There’s too many stores, there’s too much cultivation, there’s too many products,” Grossman explained to The Denver Post. “Right now, all the investors are sitting on the sidelines, and kind of waiting to time the bottom—and nobody knows exactly when that’s going to happen.”
Amidst the uncertainty of the situation, Grossman and many other business owners have had to lay off many of their staff to continue paying the bills. “Most companies I know are losing money, or they’ve shut down and scaled back,” said Grossman. “A lot of companies that are my size or smaller are really feeling the burn.” She also suggested that more mergers may take place in order to help bolster smaller businesses against larger companies.
Initially there was a drive for cannabis tourism to bring people to Colorado, but even as travel has become safer in the wake of COVID-19, the increase in states with recreational cannabis has caused a shift in interest. According to Native Roots Cannabis Company vice president of marketing, Buck Dutton, sales for 4/20 decreased from recent years: “…people don’t see the need to travel here to spend their 4/20 with us,” Dutton told The Denver Post. “The only expectation that it lived up to is that we thought it was going to be bad.”
Marijuana Industry Group executive director Truman Bradley likens Colorado’s current situation to “the ghost of Christmas future.” The excitement that drove sales for Colorado as the first state to legalize recreational cannabis has since slowed. Bradley stated that the only way Colorado can survive now is for the industry to “get leaner,” in terms of competition being thinned out. He also calls on state legislators to reevaluate legalization. “It’s critical that lawmakers understand that decade No. 2 of legalization needs to look fundamentally different from decade No. 1,” Bradley stated.
“We believe these states will represent opportunities in the future, but the current price compression caused by a lack of meaningful enforcement of the illicit market prevent us from generating an acceptable return on our investments,”
What a crock. If you sell a high quality product at a fair price people will buy it. The black market is offering what you are failing to offer
They are gonna have lunch with their cop friends and before them to start cracking down small home grows so they can try to help their failing businesses.
Washington State Governor Jay Inslee signed that states legal recreational ( voter approved the same day as Colorado) bill into law before Colorado making Washington the world’s first political entity to legalize cannabis. Colorado, was saddled with a Republican legislature that impeded the Colorado Governor’s signature.
Order weed online in Colorado from BUY420 WEEDS DOT COM and experience a Jaw dropping service that even Mcdonalds lol
Happiness is registered through the same neurotransmitters that THC is. Therefore by definition pot should be legal nationally because of the Declaration Of Independence clause ‘the right to liberty and the pursuit of happiness’. Why doesn’t the powerful lobby from NORML or High Times Magazine argue this in court Federally?
It’s time that Colorado and California realize that they are not needed for great cannabis anymore. Every state that is legalizing, is producing great quality for great prices….why waste your time and money going to these states for cannabis, stay home and smoke more😏
Declining prices is a good thing. Sorry for the businesses that are closing but if you lower your prices you will get more sales. People are tired of paying $150+ for an ounce. I personally hope someday I can buy a pack of 20 1g prerolls for the same price as a pack of cigarettes. Imagine paying 40 bucks for 5 cigarettes. This shit needs to be legalized federally. The black market is just offering it at fair pricing. That’s literally what business is about. One store sells x product for 20 bucks, and a competing store sells it for 10 of course people are going where it’s cheaper. No one wants to spend $100+ a week on some of nature medicine
These massive cultivation facilities have been growing thousands of pounds of shitty weed a month at 25 cents per gram then turn around and sell it for $20 a gram or even $200 plus an ounce for a decade. Yes,finally people are starting to realize that these MSO’s are putting $$$ signs on the plant and not treating it like medicine. You can easily grow better medicine in a small tent at home for about $30-$50 an ounce. Put these greedy assholes out of business! Make them close up shop and run to another fresh legal state and continue to struggle. We don’t need them!
Nothing wrong with celebrating how far we’ve come. I would urge all smokers to consider cooking with the venerable herb rather than putting hot smoke in your lungs. There’s no urgency now and (unfortunately) this new era of no pass, smoke your own personal joint takes away from the shared high. “What are you looking for?” That used to be central to “getting high”. Perhaps we’re headed to a new age of small, local growers and a more realistic approach to weed, if you believed in the music, it was never about the money. Peace.
High Times – I am disappointed by your lack of research in this matter. Did you consider the reason black market sales are on the rise? Is due to Colorado HB21-1317 completely stripping patient rights? While I am sure neighboring states bringing in legalization put a dent in recreational sales. The true loss falls under the drop in med card patients. We are talking a registry drop that goes well above 10k patients. And just as states followed Colorado’s example by bringing in legalization. They will follow in bringing in harsh rules and laws. People better start standing up.
These websites and stores are still not user friendly and really only cater to people that know products well enough to buy. How about info on which strain going with what symptoms all the way down to chemo drugs. I had to research everything for hours upon hours trying to find what may help with my sisters horrible chemo symptoms bc I was unfamiliar. Most sites don’t explain anything, which makes it difficult for new shoppers. Just so advice for any markets struggling.
Zero barrier to entry and fiercely competitive, the kid in a candy store novelty of dispensaries has come and gone. It’s called weed for a reason, it can be grown literally anywhere…this is not an investable business. I harvested seven ounces on my very first outdoor two plant grow.
So the dope dealers aka pot shop owners are selling less pot and closing stores. What wonderful news for the parents of Colorado! Their kids will have less access to this harmful drug (medically proven). Less sales also means the need to grow less pot in Colorado and California which should make the global warming extremists happy as growing pot uses a tremendous of power and water to grow. This is great news all around! Pot legalization was a bad idea from the start. Almost as dumb as getting rid of the Gallagher amendment.