Legal Weed Prices Hit Another Record Low

Colorado marijuana prices have hit a new low, according to the state Department of Revenue, with the median price per pound dropping over 63 percent since 2021.

Last October, the price slid to a record low of $658 per pound. But the DOR's latest average market rates (AMR) for a pound of marijuana flower are now at $649, the lowest price since recreational marijuana sales began in Colorado in 2014.

Released every quarter, the marijuana AMR measures median prices of various wholesale marijuana categories — despite the inclusion of "average" in the name — and extrapolates prices for the next quarter, in this case from April 1 through June 30, 2023. For four straight quarters, the AMR for flower has dropped to a new record low, and a few other marijuana plant matter categories have hit the floor, too.

The AMR follows prices of cured marijuana flower as well as trim, seeds, clones, fresh whole plants, and flower and trim allocated for extraction. Pounds of flower, fresh whole plants and trim allocated for extraction are all at record lows, too, while trim is hovering just $4 above its lowest price ever.

However, pounds of flower allocated for extraction, the starting material for high-quality concentrates such as live rosin and resin, increased nearly 14 percent from quarter to quarter, going from $350 to $405, DOR data shows. That number is still far from the apex of $901 in July 2021, but indicates that the cost of high-quality concentrates could be trending upward at dispensaries.

The steep drop in most marijuana prices has coincided with a decline in dispensary revenue. After dropping 21 percent from 2021 to 2022, this year is already off to a slower start. Colorado dispensaries reported slightly under $129.4 million in sales for the first month of 2023, according to the DOR, which is nearly 15 percent less than the $151.1 million sold in January of last year, and more than 30 percent less than sales in January 2021.

Marijuana business owners and state economic forecasts suggest that marijuana purchasing in Colorado likely peaked around the one-year anniversary of the COVID-19 pandemic, when dispensaries recorded record sales numbers. Recent economic forecasts from the governor's office don't see the marijuana industry's woes turning around until next year or later, however.

"While it is still expected that these prices will eventually increase back to higher levels, these price increases will be slower and smaller in magnitude than previously anticipated," reads a March 16 state economic update from the Governor’s Office of State Planning and Budgeting.

Through the next fiscal year, the forecast predicts a 19.5 percent drop in total marijuana tax revenue, followed by anticipated growth of about 16 percent into 2024.

As the state grapples with less marijuana tax revenue, pot industry lobbyists and lawmakers have discussed tighter restrictions on intoxicating hemp products and potential licensing caps on commercial marijuana cultivations.

On March 28, the Colorado Marijuana Enforcement Division, an arm of the DOR, will be discussing potential revisions to the state marijuana tax code, including new or updated taxation categories, wholesale transfer rules and public stakeholder suggestions. See details on the workgroup meeting here.