Colorado’s cannabis sales have continued their downward trend, with the latest official figures showing the largest year-on-year drop this year in June.
This looming cloud did have a minor silver lining, however, with sales total sales in June of $113.7m rising marginally from May’s $113.1m.
Despite this slight month-on-month respite, each month of 2024 has seen a year-on-year decline in total sales (medical and adult-use) compared to the same month in 2023, with the most significant drop occurring in June 2024, where sales decreased by 13.3%.
In the six months to June, 2024, medical sales decreased by approximately 5.8%, while retail sales dropped by about 11.2%.
The first six months of 2024 mark the lowest cannabis sales figures in Colorado since 2016.
There has been a significant decline in both medical and recreational sales since 2022, with June 2024 marking the lowest June sales since 2016.
Market saturation and oversupply have played a major role in this decline, with cannabis production in the state exceeding demand by 20% in 2023, leading to steep price drops. Wholesale prices have plummeted from $2,000-$3,000 per pound in the early years to as low as $600 per pound, making it difficult for businesses to stay profitable.
Additionally, increased competition from neighboring states like New Mexico and Arizona, which have launched their own legal cannabis markets, has reduced the influx of out-of-state customers that once bolstered Colorado’s sales. The rise of unregulated hemp-derived products has further eroded market share, offering consumers a cheaper alternative.
Economic pressures, including high compliance costs and complex regulations, have compounded these challenges, leading to market consolidation and the closure of many small businesses. The post-pandemic correction has also had a lasting impact, as the surge in demand seen during COVID-19 has subsided, leaving the market to adjust to lower sales and prices.
The post Colorado’s Cannabis Sales Decline Levelled Out in June, but 2024 Is Still Shaping up to Be the Worst Year Since 2016 appeared first on Business of Cannabis.
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