Colorado's Marijuana Industry Off to a Slow Start in 2023

After a down year, Colorado marijuana sales are off to an even slower start in 2023, according to data from the state Department of Revenue.

Colorado dispensaries reported slightly under $129.4 million in sales during the first month of 2023, DOR data shows. That's nearly 15 percent less than the $151.1 million sold in January 2022, and more than 30 percent less than the $187.6 million in January 2021.

The drop in sales has led to a decline in marijuana tax revenue, too, with state collections dropping from $423.5 million in all of 2021 to a total of $325.1 million last year. For the first two months of 2023, Colorado has reported slightly over $47.1 million in marijuana taxes and fees, which is more than 20 percent under the $58.9 million accrued in the same span last year.

Legal marijuana prices and sales figures hit record highs in the first year of the COVID-19 pandemic, but began sliding in the second half of 2021. Then the Colorado pot industry hit a full-blown recession in 2022, and the numbers are only getting worse.

The average price per pound of flower fell nearly 62 percent from 2021 to 2022, hitting a record low since recreational legalization, while medical marijuana sales also saw record lows. According to the DOR's latest release, January 2023 was the worst-performing month for medical marijuana sales ($16.2 million) since 2014, when the DOR began releasing such data, while the $129.4 million in recreational sales was a three-year low.

Marijuana business closures and takeovers have become regular occurrences in Colorado as the industry recession continues, with corporations shutting large operations in Denver and southern Colorado and a handful of dispensaries locked up for unpaid sales taxes. Other dispensaries have reportedly closed because they were unable to stock their stores.

Last week, the Colorado Marijuana Enforcement Division, an arm of the DOR, sent a memo to marijuana business owners reminding them to pay their debts and honor sales contracts. According to the MED, the memo was crafted "in response to a series of reports regarding licensees not paying invoices" to other marijuana business vendors.

Despite the tough times, however, well over a half-billion dollars went to marijuana business acquisitions in Colorado last year, and dispensaries continue to open in new spaces and former pot shops.