Despite initial fears that Colorado’s regulated marijuana market might only fulfill part of the demand from consumers, a new study shows those fears are overblown.
The study, produced by The Colorado Department of Revenue (DOR)’s Marijuana Enforcement Division, shows that in 2017, the regulated market was able to meet both resident and visitor demand for cannabis. That compares to 2014, when only 65 percent of consumption came from the regulated market. The new data shows that consumers are moving from marijuana flower, towards concentrates, which highlights a competitive market.
“This update improves upon the original 2014 market study methods and uses official market data to provide an updated insight to and assessment of Colorado’s regulated marijuana markets through 2017,” said Mike Hartman, DOR executive director in a statement provided to Green Market Report.
Hartman added: “This report gives me comfort that the licensed, regulated commercial marketplace is working well and is part of the state’s continuous effort to monitor a comprehensive marijuana regulatory framework, improve transparency and use data to inform the public about Colorado’s marketplace.”
In 2017, 340.7 metric tons of flower were regulated in the state. 301.7 metric tons went towards sales to consumer, while 34 metric tons went towards inventory and the remaining 6 were for residual marijuana.
The Colorado market continues to be a competitive and diverse area for consumers, with no one company dominating the market. The DOR report actually noted that the 10 largest operators in the state saw a decline in market share, coming in at 23.1 percent in 2017, down from 25.4 percent in 2016 and 26.6 percent in 2015.
Prices are also coming down, as the market remains extraordinarily competitive. Marijuana flower prices have “declined slowly,” according to the DOR, while the price of a standard serving of THC has “declined more rapidly.”
Though pricing trends are largely coming down, there are still some variances in different parts of the state. In mountain and border towns, consumers will pay between $8.30 and $11.75 per gram for flower, compared to $5.79 per gram for the average.
In 2017, flower comprised 61.8 percent of the market, while concentrate made up 27.3 percent, trim accounted for 5.9 percent, with infused edibles and infused non-edibles accounting for 4.9 percent and 0.3 percent, respectively.
Other highlights from the study include Colorado’s attitude towards using technology to make it easier to respond to ever-changing consumer needs, while also keeping up with regulations.
“Colorado is the first state to use inventory tracking data to understand market dynamics; the first to use flower equivalent measures; and the first to compare supply, demand, and consumption to monitor regulatory performance,” Adam Orens, Founding Partner of Marijuana Policy Group, said in a release accompanying the study.
Orens added that the findings are important to show that the cannabis market can be regulated effectively and is a sign of the “evolution of regulated cannabis markets – where governments are monitoring market data and adjusting policy accordingly.”