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Colorado’s cannabis market, once a frontrunner in the U.S. for recreational marijuana sales, has experienced a downturn. In 2023, the state’s cannabis sales barely surpassed the $1.5 billion mark, a decrease from $1.7 billion in 2022 and a significant drop from the peak of over $2 billion annually in 2020 and 2021.
This downturn marks the lowest sales year since 2017, with December sales totaling $115.8 million, culminating in a year-long total of $1.52 billion.
Despite this, Colorado has reached a milestone of $15.5 billion in total sales since the market’s inception in January 2014. The decline in sales is attributed to the end of the pandemic boom and the emergence of competitive markets in nearby states, such as New Mexico, which reported $555.8 million in cannabis goods in 2023.
The state’s market, featuring over 1,100 stores, indicates a trend toward consolidation, highlighted by Schwazze SHWZ previously targeting 100 stores. Despite ongoing price deflation, there’s a slight stabilization in retail and wholesale prices. The market is fragmented, with leading chains by PharmaCann, and Schwazze.
Michigan Faces Sales Decline Amid Expanding Market
Michigan’s cannabis industry, despite a record December, experienced a 13.5% sales drop in January, with total sales amounting to $242.8 million. The decrease reflects a broader trend of slowing growth, with the lowest year-over-year increase since March 2022.
Adult-use sales, however, continue to grow, compensating for a steep decline in medical sales. The state’s market saw significant growth, reaching $3.06 billion in 2023, a 33.3% increase from the previous year. The expansion of supply and distribution networks is expected to further boost the market.
The market, with 751 recreational and 245 medical stores, faces tough economics despite being one of the fastest-growing.
Virginia Advances Towards Retail Marijuana Sales
The Virginia House of Delegates has made a decisive move by passing HB698, aiming to establish a retail marketplace for recreational marijuana. This action comes after voters approved the end of the prohibition on recreational marijuana in 2021, with expectations for retail sales to begin by January 1, 2024.
The bill’s passage, by a narrow vote of 52-48, reflects a significant political shift, especially following the recent Democratic control over both houses of the General Assembly. This development is a critical step towards actualizing the state’s retail cannabis market, which has seen delays since the 2021 voter mandate.
The Cannabist Company Holdings Inc. CBSTF, Green Thumb Industries Inc. GTBIF, and Jushi Holdings Inc. JUSHF are set to lead Virginia’s recreational cannabis market by July 1, 2024, as analyzed by Pablo Zuanic from Zuanic & Associates.
These firms are expected to leverage their early entry, limited competition and the state’s market potential to establish a significant presence, marking a strategic advantage in Virginia’s budding cannabis industry.
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