Future is Cloudy for Colorado Cannabis

Colorado’s marijuana industry, once booming with combined sales of $226 million in 2020, is now experiencing a sharp decline as dispensaries grapple with an economic downturn. Sales have plummeted, leading to business closures and challenges for small cannabis enterprises.

According to a story in The Denver Post, the current market conditions are unfavorable. March figures show a decline in medical marijuana sales, totaling around $17 million, a decrease of approximately $5 million compared to the same period last year. Retail marijuana sales reached $122 million, but still represented a $17 million drop from March 2022.

While these numbers represent an improvement from February, when medical marijuana sales hit a record low of around $15 million, it is essential to note that sales for both recreational and medical marijuana surpassed $139 million, reaching the highest level since October 2022.

The landscape has significantly shifted since the COVID-19 pandemic, which bolstered the cannabis industry as customers stocked up on edibles and joints during lockdown. In 2023, however, Colorado’s cannabis entrepreneurs face “a perfect storm” of challenges, say the article. These include an oversupply of cannabis, insufficient demand, declining prices, increased competition from other states, the allure of the black market, a lack of cannabis tourism, and a shaky economic forecast for the remainder of the year, despite a steady slowdown in inflation.

“There’s too many stores, there’s too much cultivation, there’s too many products,” one retailer told 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.”