Cannabis sales continue to tumble in Colorado, prompting the inevitable question: how low will they go?
The state Department of Revenue recently released data for October 2023, showing total sales of just under $122.7 million — the lowest total since February 2019 — representing a year-over-year decline of about 13.6%. It’s the fourth straight month of declining cannabis sales, putting 2023 on pace to be the lowest year for cannabis sales since 2017 ($1.51 billion) and the third consecutive year of declining sales since the Colorado industry peaked in 2021 at $2.23 billion.
Individually, the adult-use and medical sectors are both shrinking. The adult-use sector in October 2023 sank to just under $107.9 million, also the lowest since February 2019. Meanwhile, the state’s medical marijuana industry continued its ongoing erosion. At just under $14.8 million, October 2023 was the second-lowest month of medical marijuana sales in Colorado since the state started tracking the industry in January 2014 (June 2023 was slightly lower, $14.6 million).
Despite the supposed sales bump from Green Wednesday (the day before Thanksgiving), November is traditionally one of the lowest selling months of the year for cannabis retailers.
Declining cannabis sales reflect a variety of economic factors, including the economy as a whole, the rebound effect following the pandemic boom and the ongoing price compression related to oversupply (for Q4 of 2023, the average market rate of flower is $750 per pound — nearly $1,000 per pound less than it was in early 2021).
Plus, the cannabis landscape looks substantially different than 2014, when Colorado and Washington took the pioneering steps to become the first two states allowing adult-use cannabis. Back then, Colorado was surrounded by five prohibitionist states and a medical-only market in New Mexico. Now, New Mexico is one of the fastest growing rec markets in the country, while Utah and Oklahoma both have their own medical programs (albeit with very different regulatory atmospheres). And the explosion of high-inducing hemp-derived products has almost effectively legalized cannabis nationwide.
Colorado’s cannabis industry has gone through a substantial contraction over the past year, with 19.4% fewer cultivation licenses, 12.4% fewer manufacturing licenses and 2% fewer retail licenses since January 2023, according to research by Green Market Report.