What's next for legal marijuana in Colorado
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On New Year's Day 2014 in Colorado, block-long lines welcomed the world's first retail marijuana sales. Fast forward to 2024 — the day passed with barely a puff of excitement.
Driving the news: The lack of fanfare reflects how cannabis has become mainstream since legal sales began 10 years ago and the downturn in sales that now clouds the industry's future.
- Total sales in 2023 are expected to fall for the second straight year from a pandemic peak, state figures show.
- The number of new and renewed licenses for retail establishments are both down about 10%, and the average market rate of marijuana bud is down 60% from its debut.
Why it matters: The next decade for the cannabis industry may prove even more consequential than its first 10 years, as the market matures in Colorado, legalization expands to more states and the industry looks to gain equal footing to alcohol, industry experts tell John.
State of play: Native Roots COO Beth Kotarba calls the current situation a market correction after years of overproduction and a decline in demand as other states legalize sales. The lure of traveling to Colorado to try legal cannabis is no longer novel, she says.
- The contraction will lead to more businesses closing, smaller employment numbers and a consolidation behind bigger brands that can absorb losses, says Mason Tvert at Denver-based cannabis policy firm VS Strategies.
What they're saying: Kotarba expects the industry will rebound with the economy, but acknowledges it's at an inflection point.
- "It's become much more competitive," she says. "There's a lot of vendors out there and our consumers are much more discerning in what they want."
What to watch: The challenges in the market are shining a spotlight on the strict regulations the industry must meet — ones crafted when cannabis first became legal.
- The Biden administration's move to reclassify marijuana would remove banking restrictions, and Colorado advocates are pushing for easing onerous licensing rules in the coming legislative session.
- "We can expect the process to look more and more like what we see with alcohol," Tvert says.