As more states begin selling adult-use cannabis, some states are seeing sales decline or at least plateau. In the case of a mature market like Colorado, sales have actually dropped. Colorado was the OG of adult-use sales, creating an onslaught of canna-tourism. Now, many people can go to states closer to where they live. Illinois and Michigan can service the midwest, while Massachusetts got a head start on the Northeast. Oklahoma has grabbed the central market and likely lots of Texans.
Colorado Sales Fall
Earlier this week, the Colorado Department of Revenue’s (CDOR) figures released data showing that cannabis sales of $145 million in February dropped 3% from January’s sales of $151 million. It’s also a big drop of 13% from sales in 2021. For the first two months of 2022, cannabis sales had hit $296 million, while in 2021 the first two months delivered sales of $354 million. The pattern of February sales being lower than January seems to be consistent with previous years. Colorado hasn’t cracked $200 million in sales for a month since July 2021.
That also means tax revenues from cannabis are slipping as well. Taxes and fees dropped to $27 million in February from $28 million in January. To be sure, these are all still respectable numbers, but it does demonstrate that the cannabis market has limits.
Michigan released its cannabis sales figures for March and while the state breaks them into two categories – adult-use and medical, sales have slipped here as well. Adult-use sales in March did rise to $121 million but fell 6% from February. Medical cannabis sales dropped 33% from last year but did increase 23% over February. However, before anyone fears the market is having some sort of green-out phase, overall sales in 2021 were $1.79 billion, and 2022 looks to be on track to beat that. More municipalities are coming on board and more popular products hitting the state.
While the California market has its fair share of problems, which the Green Market Report covered in a recent series, it remains a huge market. However, even the biggest markets can experience declines. Looking at 2021 figures, the second quarter was the best clocking in with $1.42 billion in sales, but that steadily declined to $1.29 billion in the third quarter and then $1.25 billion in the fourth quarter. This just barely topped the fourth quarter of 2020 that reporting $1.24 billion in sales. The state has not released any sales data for 2022 yet.