Colorado, once the poster child for legal cannabis success, is now facing a harsh reality as its industry struggles to stay afloat amidst a myriad of challenges. The state, which saw peak revenues of $2.2 billion in 2020, has witnessed a staggering $700 million decline in sales over the past three years, with far-reaching consequences for the economy and those involved in the sector.
The causes of this downturn are multifaceted, ranging from an oversaturated local market and increasing competition from nearby states to the persistent federal illegality of marijuana, which subjects operators to exorbitant taxes and costly regulations. The spread of cheap, largely unregulated intoxicating hemp-derived products has further heightened competitive pressures, making it increasingly difficult for Colorado’s cannabis businesses to maintain their footing.
Wanda James, owner of the Simply Pure dispensary in Denver, succinctly captured the industry’s current state, lamenting, “It’s like the wind in our cannabis sails in Colorado has just been sucked all the way out.”
As Colorado’s cannabis industry navigates these turbulent waters, it serves as a cautionary tale for other states where marijuana is legal. Jordan Wellington, a partner at Denver-based cannabis policy and public affairs firm Strategies 64, acknowledged the state’s role in its own struggles, stating, “We’re a victim of our own success. New markets drawing investment away, new markets drawing purchasing away — all of these different things combined into the soup of the challenges [facing] Colorado.”
As the industry continues to evolve and mature, it is clear that Colorado’s cannabis sector must adapt to the changing landscape if it hopes to regain its former glory and maintain its position as a leader in the legal marijuana market.
