Overbuilt and overgrown, Colorado's cannabis industry is now facing a major shakeout. Pandemic-fueled demand has evaporated just as new grow operations flood the market with cannabis. It has turned what had been unending growth into the industry's first downturn.
Since adult-use cannabis started in 2014, sales had never declined on a year-over-year basis. But starting in July 2021, the industry has logged 17 straight months of decline. Prices for adult-use flower have dropped 23 percent over the last 12 months, and they don’t look likely to rebound anytime soon.
“Black Friday used to be a big day for us,” said Christopher Stefan, who specializes in cannabis real estate. “And it hit with a thud this year. We’ve talked to multiple retailers, and they just aren’t seeing customers materialize."
About $1.5 billion worth of cannabis has been sold through October in Colorado, down 21 percent from the same period in 2021, a decline of more than $400 million.
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