Sales of Recreational Marijuana In Colorado May Reach $480 Million This Year
For all the conflicting stories about marijuana’s true benefits and risks, there’s one thing for certain: the legalized pot business in Colorado is booming.
According to a survey conducted of marijuana dispensaries by Convergex, "a global brokerage and trading related services provider," sales of recreational pot have been steadily climbing since the state first allowed its use in 2014, with this year looking particularly bountiful. "Given our revenue estimates for January through April, we expect stores to gross up to $480 million this year collectively, a +50 percent comp to 2014," said Nicholas Colas, Chief Market Strategist for Convergex, in a website post by the company.
This is despite the fact that the average price of the drug has dropped, with 1/8 of an ounce now only selling around $30 to $45, down from the $50 to $70 price seen last June. And though stores have continued to see the same amount of customers pass through their doors, they’re buying less with each transaction, from $100 spent each trip last year to $50 now.
The reasons behind this shift is fairly simple. "More competition and expansion of grow facilities contributed to this price decline, but it is also a natural result for any maturing industry as dispensaries try to find the market’s equilibrium price," Colas said.
Other interesting conclusions from the Convergex survey include:
April 20th, or “420”, is as popular as expected, with one manager claiming that he served more than 1000 customers over a three day period surrounding the unofficial holiday. The fact that it’s right after tax season, when people are flush in refund cash, probably helps too.
Dispensaries are using magazine and online ads and ticket raffles to entice customers to spend more, just like your local laundromat.
Millennials are interested in cleaner, healthier marijuana, with hash and concentrates becoming especially popular (the latter can be used to create cannabutter, which goes into edible pot products). And despite the obvious appeal of those notorious brownies, companies are branching out to create hemp protein bars (Potein bars?) to meet those demands.
September 16th (a Wednesday) may become a new pot holiday, with the special 10 percent sales tax being temporarily lifted for one day only as a part of a provision signed into law this month. That same law will permanently lower the tax to 8 percent in 2017, in hopes that it will cut into the black market. Of course, normal sales and state taxes will still apply.
So, if you’re in the market for that legal and recreational high, it seems that this year is as good as any.