Colorado Market Rebounding Somewhat, but Contraction Isn't Over

The Colorado market rebound is somewhat all over the map.

A longtime Colorado cannabis distributor and deal broker who works with dozens of farms and brands said he expects the cultivation sector in the state to continue shrinking more than it already has this year, but the wholesale market has already seen a bit of a rebound due to the contraction.

“A few years ago, we had 1.4 million plants in the ground. Last I looked, it was around 900,000,” said Aaron Shaw, a longtime Colorado marijuana industry insider who runs a grow called Higher Function. He also helps buyers find dispensaries on the secondary market.

Shaw predicted that scores more growers will go under in coming months before the market truly stabilizes.

“I think we’ll see another 50-100 cultivations go out of business because they’re undercapitalized,” Shaw said.

Per pound wholesale prices in Colorado at the end of October, Shaw said, were breaking down as follows:

  • Outdoor flower, $350-$400.
  • Greenhouse flower, $500-$650.
  • Low-grade indoor, $700-$800.
  • High-grade indoor, $800-$950.
  • Top shelf indoor flower, $1,000-$1,800.
  • Pre-packed top shelf indoor flower (as opposed to loose bulk flower), $1,600-$3,200.

Shaw added that there another industry problem in Colorado: more retailers not paying farmers and brands, as more become strapped for cash. It’s something he hopes the state will step up to help enforce payments that are due.

But so far, the state has stayed out of the issue, Shaw said, so those in the industry have already begun blackballing certain retailers.

“There’s a Facebook page called ‘Colorado: Who owes you money?’ There’s about 15-20 stores on that already,” Shaw said. “So there is already a blackball (list). What they do is, they order from one grower, they don’t pay them, and then they just order from another grower.”

He added, “It’s a dirty secret that no one’s talking about, and it’s killing people.”

That said, the market rebound is somewhat all over the map, with some retailers reporting that their sales are trending down over recent months, while others are up significantly, Shaw said.

Another noteworthy trend, he said, is that sales of dispensaries have picked up again in recent months, by about 25% from what he saw in 2022. And many of the dispensary purchasers are existing Colorado marijuana companies that have changed business strategies and decided to expand their footprint for various reasons.

“The growers wanted to get vertical and have stores, and this way they could have a buffer, and they could charge a little more for their wholesale product,” Shaw said. “It’s also two- or three-store operators who know they need to get to five or six stores to really be profitable and scale.”

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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