Cannabis businesses in Colorado hoping to get an end-of-the-year holiday bump in sales were probably disappointed, according to the latest data released by the state Department of Revenue.
It was the worst December for total cannabis sales in the state since 2015, bringing to a close the worst year of sales since 2018.
Total December sales of $115.8 million represented a 16.8% decrease year over year. At $14.7 million, December was also one of the worst months ever for medical marijuana sales. Only June ($14.6 million) and November ($14.5 million) of 2023 were worse.
For the year, total sales were down 13.5% from 2022; it’s the second consecutive year of declining sales since the Colorado industry peaked in 2021 at $2.23 billion.
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 couple years, 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.