1906 Edibles to Exit Colorado Marijuana Market

Edibles maker 1906 was founded in Boulder over seven years ago, but it will leave its home state of Colorado at the end of February, according to CEO Peter Barsoom.

Known for making edibles and pills geared toward specific effects — including energy, focus, sleep and even arousal — 1906 decided to exit the Colorado market in order to focus on sales in states along the East Coast and in the Midwest, as well as the brand's growing hemp-derived cannabinoid products that are sold online, according to Barsoom.

"Colorado has been our foundation. It was the place where our vision for cannabis took shape and flourished, and it is here that 1906 has become the number-one fast-acting brand, the number-one pill brand and a leader in cannabis innovation," he says. "Our decision to leave Colorado comes from a strategic need to face the evolving world of cannabis, and remaining in Colorado's contracting market is just not economically viable."

After increasing for seven straight years to a record $2.2 billion in 2021, annual dispensary sales have been falling in Colorado, hitting just over $1.5 billion for 2023. Record-low wholesale prices and a 30 percent decline in employment have also hit cannabis businesses during that span, and infused-product manufacturing licenses have dropped about 10 percent, according to state Department of Revenue data.

As cannabis sales continued to decline, the state marijuana licensing authority sent out a memo last year detailing increasing complaints from cannabis vendors about unpaid dispensary bills.

"Overall, dispensary sales are down and there is no indication that it's going to get better," Barsoom predicts. "Vendor payments are definitely a challenge in this market. People are paying slowly. Number two: foot traffic in dispensaries is really down. The dispensaries are in a lot of hurt right now."

Colorado dispensaries will still carry 1906 products into the spring, as the company will continue fulfilling vendor orders through the end of February, Barsoom says. But after those supplies are exhausted, any vestige of 1906 will be gone from Colorado, since 1906's hemp-derived products cannot be sold in this state.

Although industrial hemp products are legal in Colorado, retail sales of THC products derived from hemp are banned under a new law enacted in 2023. However, the majority of states allow for hemp-derived THC products to be ordered by mail, which has enabled 1906 to hit over $1 million in sales in three months, according to Barsoom.

"I think what we're seeing is now that legalization has expanded across the country, people who were coming to Colorado to specifically purchase cannabis no longer need to, or people who are in Colorado just for a visit have legal cannabis back in their home state, so they're not stocking up," he adds. "Whether it be the mountain foot traffic or the Denver foot traffic, fewer and fewer people are coming into stores, and those who are, they're more value-conscious. We all built a business on a different set of expectations."

According to Barsoom, 1906's exit from Colorado "has nothing to do with" a 2023 lawsuit and state warning over its Midnight line of sleep-aid products, which were connected to adverse liver effects.

The ingredient linked to the liver issues was an herbal extract called Corydalis rhizome. Upon learning of consumer complaints, 1906 removed Corydalis from Midnight ingredients and replaced it with extractions from the Stephania plant, according to the company. However, both Corydalis and Stephania extractions contain tetrahydropalmatine, an alkaloid that is connected to liver injuries.

The Colorado lawsuit claiming liver injury, filed in Adams County District Court, has been settled, Barsoom notes; 1906 discontinued all Midnight products in 2023.

1906's exit from Colorado follows the December departure of Coda Signature, another longtime edibles brand founded in Boulder. Early last year, cannabis industry giant Curaleaf ended operations in the state, shutting down a handful of notable edibles and vape brands as well as Colorado's second-largest outdoor cannabis cultivation. (It's since been purchased by Mammoth Farms.)

If federal legalization or a rescheduling of marijuana enables 1906 to ship cannabis products into Colorado again, Barsoom is hopeful of returning to the state — but other expansions and comebacks are not in the company's plans right now.

"We love Colorado. We love our customers and our dispensaries there. I would love a way for 1906 to return to Colorado in some way, shape or form," he says. "Like everything in cannabis, nothing comes easy."