A recent report from Denver Post Analyzes fallout from the post-pandemic cannabis industry in Colorado. While the state has reached a peak of $226 million in combined recreational and medical cannabis sales, current sales are down and small businesses are struggling to stay afloat.
“The market is just bad. It’s bad right now,” said cannabis sales rep Val Tonazzi Denver Post. “There are companies closing, left and right.”
In February, medical cannabis sales in Colorado fell to $15 million, the lowest group since retail sales began in 2014. March brought an uptick in medical cannabis sales, about $17 million, but was $5 million less than March 2022. Similarly, recreational sales in March were reported at $122 million this year, but it’s a $17 million decrease from last year’s numbers.
On May 9, the US 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 from oversupply of cannabis products, lack of demand, record low prices, and lack of cannabis tourism.
Over the past few years, several states bordering Colorado have approved recreational cannabis. This includes Montana And Arizona in 2020 and New Mexico in 2021, creating competition for Colorado State.
Vangst, a cannabis recruitment company, recently released 2023 Vangst Jobs Report. The report states that there has been a 2% decline in cannabis jobs, and Colorado It is ranked as the second highest country in terms of cannabis job losses. It also ranked sixth on the list of top cannabis jobs with fewer jobs than states like California, Michigan, Illinois, Florida, and Massachusetts.
It’s not just small cannabis businesses falling on hard times. Larger companies, like Curaleaf, are also pivoting. in january, Coralif It closed offices in Colorado, California and Oregon “as part of its continued efforts to streamline its business.” According to Curaleaf CEO Matt Darin, the move was also made due to burgeoning competition in the black market. “We believe that these countries will present opportunities in the future, but the current price pressure resulting from the lack of serious enforcement of the illicit market is preventing us from achieving an acceptable return on our investments,” Darren said in a press release.
The closing of cannabis businesses is affecting the real estate market as well. a National Association of Realtors The report recently explained “a decrease in commercial property purchases by companies associated with the marijuana industry and a corresponding increase in leasing activity.”
Denver Post I spoke with local entrepreneur Renee Grossman, who has built five retail storefronts in Colorado since 2013 and has also moved into farming and manufacturing as well. “There’s a lot of stores, there’s a lot of farming, and there’s a lot of produce,” Grossman explained. Denver Post. “Right now, all investors are sitting on the sidelines, kind of waiting until the end — and no one knows exactly when that will happen.”
Amidst the uncertainty of the situation, Grossman and many other business owners had to lay off many of their employees to keep paying the bills. “Most companies I know are losing money, or have closed down and downsized,” Grossman said. “A lot of companies that are my size or smaller are really feeling burned.” It also suggested that more mergers might take place in order to help leverage smaller companies against larger ones.
Initially there was a push for cannabis tourism to bring people to Colorado, but even as travel became safer in the wake of COVID-19, an increase in states using recreational cannabis has caused a shift in interest. According to Native Roots Cannabis Vice President of Marketing Buck Dutton, 4/20 sales are down from recent years: “…people don’t see the need to travel here to spend 4/20 with us,” Dutton said. Denver Post. “The only expectation that was fulfilled was that we thought it was going to be bad.”
Marijuana Industry Group CEO Truman Bradley likens the current situation in Colorado to the “ghost of the future of Christmas.” The excitement that drove sales of Colorado as the first state to legalize recreational cannabis has slowed. Bradley stated that the only way Colorado could survive now was for the industry to become “much leaner”, in terms of less competition. He also called on state lawmakers to reassess legalization. “It is important for lawmakers to understand that the second decade of legalization needs to look fundamentally different from the first,” Bradley stated.