As wholesale cannabis prices reach record lows, a group of Colorado growers has requested that the state stop issuing cultivation licenses. Medical cannabis sales have experienced their lowest recorded monthly totals five times so far in 2022, and the price per pound of all commercial cannabis reached a record low last month, according to the Colorado Department of Revenue. The drop in prices has led to a steady decline in recreational sales for over a year, DOR data shows, with inflation and reduced cannabis tourism both cited as contributing factors by cannabis business owners.
However, the biggest contributor to tanking cannabis prices is an oversupply of products, according to a coalition of thirty Colorado cannabis growers and dispensary ownership groups.
"For the first time since legalization was implemented, cannabis sales and the revenue generated from cannabis taxes will be substantially lower than the previous calendar year," reads a September 15 memo to the state from the coalition. "The problem is further exacerbated by the country's broader economic situation, with record-high inflation driving down sales of consumer goods. Despite a decrease in demand, the supply of cannabis continues to increase, with new licenses being issued and additional cultivation capacity being authorized to current licensees."
There are 798 active adult-use cannabis growing licenses in Colorado, according to the MED, up from 716 at the beginning of 2021. During that same span, the average price per pound of cannabis flower has fallen nearly 62 percent, while annual dispensary sales are currently on pace to come up about 20 percent short of the $2.2 billion sold in 2021. As prices and sales continue falling, dispensaries and growers have had to lay off staff; some have shut down altogether.
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