Steep Contraction in the Colorado Cannabis Market
- The cannabis industry in Colorado is experiencing a significant decline, with many growers and manufacturers leaving the market.
- The number of active cannabis business licenses has decreased by 302 since January 2022.
- Cultivators have seen the biggest drop, with a 19.4% decline in licenses since January.
- The manufacturing sector has also taken a hit, with an 8.6% decline in active licenses since January.
Operators appear to be fleeing the oldest regulated recreational marijuana market in the United States – Colorado, which launched adult-use sales on New Year’s Day 2014.
Since the beginning of the year, scores of growers and manufacturers have called it quits as the industry has faced one of its toughest periods ever.
Looking at the most popular and prolific cannabis business license categories, which includes cultivators, manufacturers and retailers, the number of active permits has shrunk by 302 since just January, according to statistics from the state Department of Revenue.
But the contraction appears to have begun earlier than that.
Cultivators have seen the biggest drop, with a whopping 19.4% license decline since January, and a 23.5% decrease since January 2022. As of Oct. 3, there are 979 active marijuana grow permits issued, including 325 medical and 654 recreational.
While the manufacturing sector has fared slightly better, it has taken a significant hit as well. The number of active business licenses in the segment has declined 8.6% since January and is down almost 12% since the start of 2022. There are currently 464 infused product makers in Colorado, including 191 medical and 273 recreational.
Retailers appear to be the most resilient to the industry’s broader woes, but even here, there are still fewer today than 10 months ago. Active cannabis shop licenses are down 2% since January, to a current total of 1,044, which includes 361 medical dispensary permits and another 683 adult-use.
The Colorado market appears to have peaked in 2022, although some of the licensing data from 2021 is not available on the state’s website.
In January 2022, Colorado boasted:
Until last year, the state’s marijuana industry consistently reported year-over-year growth since its inception in 2014, when it began with just 1,698 total business licenses.
Several factors may be behind the reversal, including the opening of a recreational market in New Mexico and Oklahoma’s booming medical marijuana industry.