A recent analysis by The Denver Post sheds light on the current challenges facing Colorado’s cannabis industry post-pandemic. The industry once celebrated a high of $226 million in combined recreational and medical sales, but now sees a significant decline, impacting small business owners.
“The situation is quite dire at the moment,” according to Val Tonazzi, a salesperson in the cannabis industry, during an interview with The Denver Post. “Numerous businesses are shutting down.”
By February, medical cannabis sales in Colorado had dropped to a low of $15 million, marking the smallest amount since sales began in 2014. In March, there was a modest recovery to $17 million in medical sales, yet this was still $5 million lower than in March of the previous year. Recreational sales in the same month totaled $122 million, down $17 million from the prior year.
On May 9, the U.S. Department of Health and Human Services released a fact sheet on the “End of the COVID-19 Public Health Emergency,” noting that while the nation’s various sectors are returning to normalcy, the cannabis industry continues to face challenges like oversupply, plummeting prices, and a decrease in cannabis-related tourism.
With nearby states such as Montana and Arizona legalizing recreational cannabis in 2020, and New Mexico in 2021, competition for Colorado has intensified.
The recent 2023 Vangst Jobs Report indicates a 2% decrease in cannabis industry jobs, with Colorado experiencing significant job losses, ranking second among states affected.
Larger cannabis corporations are not immune to these challenges either. In January, Curaleaf announced closures in Colorado, California, and Oregon to streamline operations amidst fierce competition from the black market, according to Curaleaf CEO Matt Darin.
The downturn in the cannabis sector is also impacting real estate, with a shift from purchasing to leasing properties as noted in a recent report by the National Association of Realtors.
Renee Grossman, who owns multiple retail cannabis stores in Colorado, shared with The Denver Post her perspective on the oversaturation of the market. “Investors are waiting for the market to bottom out, and no one knows when that will be,” she remarked.
Despite previous boosts from cannabis tourism, the rise in similar markets in neighboring states has diverted interest away from Colorado. Buck Dutton from Native Roots Cannabis Company noted that even the traditionally high sales on April 20 have declined significantly.
Truman Bradley, executive director of the Marijuana Industry Group, warns that the state needs a strategic shift to thrive. “We need to adapt and reevaluate our approach to stay competitive,” Bradley stated.
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