After a period of record-low cannabis prices and an industry crash of sorts after the COVID-19 pandemic first hit, it looks like Colorado’s cannabis market might be taking a turn for the better.
According to a KDVR report, average cannabis prices in Colorado increased this month from $649 to $703 for a pound of flower, marking the first time cannabis retail prices have ticked up since October 2021.
While it may be a bit too soon to get excited about a new and improved cannabis chapter for the Centennial State, it’s a beacon of hope after the longest stretch of time with such low prices since Colorado legalized cannabis in 2012 and sales began in 2014.
Prices first hit a low point in 2018, seeing a surge through the initial days of the pandemic with more folks at home and looking for ways to cope with the uncertainty. In fact, with the pandemic, sales reached some of their highest levels between the summers of 2020 and 2021, but prices have slowly fallen since early 2021, according to figures from the Colorado Department of Revenue.
In January 2021, flower prices had reached their highest peak since 2016, at $1,731 per pound, but just over two short years later, the price had plummeted to $649 in April 2023, the lower price ever recorded by Colorado since it first launched legal sales.
As of early 2022, cannabis prices have been sitting at roughly half the price of the previous two years, and sales themselves have hit five-year lows. For perspective, Colorado hit its all-time high in July 2020, with approximately $226 million in total sales. Since Winter 2022, total monthly sales have bounced between $125 million and $140 million.
The compounding effects have made the once thriving Colorado cannabis market feel a bit grim as of late, to say the least. Along with routinely lower adult-use sales, Colorado’s medical sales decreased to $15 million in February, the lowest amount since retail sales launched.
“The market’s just bad. It’s bad right now,” cannabis salesperson Val Tonazzi told The Denver Post in May. “There’s businesses closing, left and right.”
The U.S. Department of Health and Human Services also announced a fact sheet last month, detailing the “End of the COVID-19 Public Health Emergency.” Many other U.S. businesses simply got back their normal work, but cannabis business owners don’t have it so easy, with many left to deal with an oversupply of cannabis products, lack of demand, dropping prices and a lack of cannabis tourism.
Colorado is in a unique position as one of the first states to usher in cannabis for adult-use. It was incredibly novel during the first several years, as the state was one of just a small handful of regions consumers could find legal recreational cannabis in the United States. Of course, we know that is far from true today: 23 states, two territories and the District of Columbia have all legalized adult-use cannabis as of June 2023.
The huge swath of states with no access between Washington and Colorado now includes legal recreational cannabis in a number of surrounding states, like Nevada, New Mexico, Arizona, Oregon and California, effectively creating more competition for Colorado and more places for cannabis-curious tourists to explore.
Speaking with the Post, Marijuana Industry Group Executive Director Truman Bradley compared the situation in Colorado to the “ghost of Christmas future.” He said that the initial excitement about Colorado’s emerging cannabis industry has since slowed. Now, he said the only way Colorado can survive is for the industry to “get leaner,” i.e. thinning out the competition. He also said that state legislators should reevaluate what legalization looks like in the state moving forward.
“It’s critical that lawmakers understand that decade No. 2 of legalization needs to look fundamentally different from decade No. 1,” Bradley said.
