Colorado legalized recreational marijuana a year ago, and prices at Colorado’s recreational marijuana dispensaries were high, but now they seem to be dropping drastically.
A global brokerage company surveyed numerous marijuana dispensaries in Colorado to better understand the new and flourishing market.
What the survey found was that prices are declining faster than many had expected and number of customers at dispensaries continues to increase.
Part of the survey noted:
“Since last June, the average price of an 1/8th ounce of recreational cannabis has dropped from $50-$70 to $30-$45 currently; an ounce now sells for between $250 and $300 on average compared to $300-$400 last year. 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.”
Sales are still exceeding last year’s. And according to the survey, sales increased by 98% year-over-year in April. Taking that into account, surveyors expect dispensaries to gross up to $480 million this year, which would be a 50% increase over 2014.
The survey also noted:
“Our contacts still report between 100 to 300 customers entering their stores each day, but they only spend about $50 per visit compared to $100 last June. About half of these customers are tourists in most stores we interviewed. … The 10% sales tax on recreational cannabis will be repealed only on that day (September 16) due to a provision included in a bill Colorado Governor John Hickenlooper signed into law earlier this month. The bill also permanently cuts the 10% sales tax on recreational marijuana to 8% in 2017 in an effort to squeeze out the black market.”
Many medical marijuana states – including Arizona, California, Massachusetts, and Nevada – are expected to vote on legalizing recreational marijuana for adult use in 2016.