Marijuana
Photo courtesy of Wesley Gibbs (NxRx7_mPdEk-unsplash).

Colorado became the first state in the U.S. to legalize recreational sales of marijuana starting in 2014 and residents were shocked about how well it kicked off at first. Being one of two states (Washington legalized recreational marijuana the same year) where people could legally buy the drug without having medical reasons, the marijuana industry boomed right away.

In fact, in the first several years marijuana was legal, sales for marijuana products were high and local governments were receiving large amounts of tax dollars. The marijuana industry continued to grow in sales every year up until the coronavirus pandemic struck in 2020.

But while most industries saw a decline in sales, marijuana sales increased during the shutdowns. Many saw the marijuana industry as one sector that proved to be pandemic-proof because people were still purchasing marijuana while everyone was stuck at home.

The Marijuana Industry Takes a Turn for the Worse in 2022

But after the pandemic came to an end, the marijuana industry started to drastically slow down. After 2021 saw a record of $2.2 billion in marijuana sales, the sales in 2022 took a serious dive. The fact that more states legalize recreational marijuana every year is one factor that has caused the decrease.

According to an article published by 9News in December, there was a 20 percent drop in marijuana sales in October 2022 from the numbers generated the same month in 2021. The wholesale price for marijuana also dropped by nearly 50 percent from October 2021 to October 2022 down to a near-record low of around $650 per pound.

According to the new 2022 figures from the state Department of Revenue, Westword reports that the state collected about $325.1 million in marijuana taxes and business fees last year. This figure is down around 23.3 percent from the $423.5 million generated the year before.

Politico reported late last year that marijuana prices have dropped all across the country. “In Colorado, prices have dropped by 51 percent over the last two years, according to BDSA, a cannabis analytics firm,” Politico reports.

What Has Caused Sales and Prices to Drop?

A quick search on the internet can reveal that the recent change in the marijuana industry was caused by several factors. An article published by Bloomberg stated that the price declines are an “after-effect” of the industry’s strong growth that was seen during the pandemic-related lockdowns.

Rick Maturo, the director of insights and intelligence for the BDSA cannabis data firm, said that businesses in the industry may have expected the surge of sales that took place during the pandemic to continue after the lockdowns ended.

But many people stopped buying as much marijuana once the world started to open back up, which created an excess of raw marijuana. Maturo said that the industry still faces competition from a thriving black market marijuana industry.

An article published by CPR also explains how the demand surge during the pandemic has caused prices to drop in the last year. The article explains that when times were good during 2020 and 2021, more wholesale growers got licensed and more counties in the state started to allow marijuana grow operations.

Since the licensing process for these types of businesses takes some time to complete, many of the new grow operations weren’t up and running until 2022. “I think it was just a matter of oversaturation,” Vontrez Wilson, grower and owner of cultivation company Optimum Grow, told 9News. “A lot of people got into the game and got into the industry.”

Wilson said that many of the dispensaries aren’t being hit as hard as they are still able to sell different types of products. He said that wholesale growers have taken the biggest hit as about 40 percent of the growers near Wilson in Southeastern Colorado have already gone out of business.

An article in the Colorado Sun said that inflation and worry about the economy could also be factors that have caused a drop in marijuana demand. The Colorado Sun also reports that neighboring states like Oklahoma and New Mexico legalizing the drug have caused Colorado sales to drop. There are now a total of 19 states that allow recreational marijuana sales, which has put Colorado in a position where it is not the only place to purchase marijuana products as it had been in the past.

Marijuana sales in cities and counties that sit on the Colorado border, like Trinidad, have taken a hit in sales and tax revenue after New Mexico made recreational marijuana legal. “I think that shows that lots of cannabis, up to this point, was going back to neighboring states,” Spencer Ward, a longtime salesman for Bronnor Corp., which manufactures edibles and infused products for brands that are in 400 stores told The Colorado Sun. “I would estimate in the ballpark of a few hundred million dollars in product a year was leaving Colorado. It’s about to get harder for smaller operations to compete.”

Experts Say There is no End in Sight

So far, many businesses in the marijuana industry have been forced to close. The marijuana delivery service Doobba shut down along with Buddy Boy dispensaries, which were one of the pioneers in the industry on the Front Range. The dispensary chain Tweedleaf had to close seven stores across the state after their business licenses were suspended due to unpaid taxes.

“I don’t see this industry coming back to where it was,” Ari Cohen, former owner of the Doobba delivery service, told the Colorado Sun. “We are in a period where the prices for everything are going up but the prices for cannabis are going down while costs are increasing. It’s the opposite of what should be happening. And it’s largely self-inflicted while we are in this race to the bottom.”

Despite business closures and a decline in sales and prices, the state keeps issuing more licenses for dispensaries and grow operations. And during elections last year, several municipalities across Colorado asked the voters whether recreational marijuana sales should be allowed, which may cause the market to gain even more marijuana businesses. According to an article published by Westword, Colorado Springs and unincorporated Jefferson County rejected adding retail marijuana sales, but there were measures that approved the sales in Palmer Lake, Grand Lake, and Cripple Creek.

Many have even feared that even though retail marijuana has recently been legalized in new parts of the state, dispensaries may see the risk as being too high to add more businesses to the state. In Colorado Springs, the recreational marijuana initiative failed, but it was passed in Palmer Lake and Cripple Creek.

Palmer Lake only allowed the two current medical marijuana businesses operating in the city to switch to retail marijuana, but Cripple Creek will be opening its doors to a number of dispensaries that has yet to be determined.

As soon as voters in Cripple Creek approved recreational marijuana sales, the city council established a moratorium on licenses to prevent businesses from coming into the gambling town for the next few months. But according to city officials, the city has already had about 10 businesses apply for recreational marijuana licenses in the city.


The Maverick Observer is an online free-thinking publication interested in the happenings in our region. We launched in February 2020 to hold our politicians and businesses accountable. We hope to educate, inform, entertain, and infuse you with a sense of community.


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Trevor Phipps
For about 20 years of his life, Trevor Phipps worked in the restaurant industry as a chef, bartender and manager until he decided to make a career change. For the last five years, Trevor has been a freelance journalist reporting the news in the Southern Colorado region. He specializes on crime, sports and investigating history. Trevor is a reporter for a weekly newspaper in Teller County called The Mountain Jackpot and is the managing editor for Pikes Peak Senior News, which is a bimonthly senior citizen lifestyle magazine. When Trevor is not reporting on the news, he is spending as much time outside hiking, camping and fishing. He also likes to keep up his cooking skills and spends time mastering his barbecuing and other culinary skills. Trevor has recently taken up an interest in 3D printing as a hobby.

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