Not too long ago, if you wanted to buy cannabis in Colorado, going into a dispensary wasn’t even an option. You had to do it the old fashioned way, as the flower in any form or fashion was still quite prohibited. You may be able to relate to the “seedy” nature of meeting up with a friend in a poorly lit parking lot to exchange a wad of cash for a plastic bag of herbal medicine that was and still is, incredibly, viewed as a dangerous drug.
Fortunately, the stigma of both medical and recreational cannabis has worn away a bit, allowing the Centennial State to legalize the herb on both important fronts. This has led to a “Green Rush”, with both arms of this booming industry hoping to get the biggest slice of the pie.
The smell of change
The prices on average for whole-flower cannabis in Colorado at the dawn of legalization left much to be desired in comparison to what you could potentially get through your friendly neighborhood dealer. There are obvious downsides to doing things on that side of the law, one of which is that in many cases you don’t really know what you’re getting. Just because the guy or gal said it was called “Super Mojo Loco Fuel” didn’t mean that it was the real deal. Dispensaries were finding themselves left with more product than desired at the end of the day. This has forced the industry to react to competition and to the market forces of supply and demand, just like any other money-making enterprise.
Since dispensaries opened in 2014, the price for whole-flower cannabis has dropped as much as 50 percent in some cases. This can primarily be attributed to the overpopulation of growers and distributors in locales like Denver, where competition between them and the black market has forced them to adjust in order to survive. With that said, there is absolutely no shortage of flower to be found in the state. You can likely find anything and everything strain-wise to suit your tastes. From the consumer’s standpoint, who could ask for anything better? Legal whole-flower prices are at an all-time low, with a wide variety to select from.
You have options
Yes, you have options, but the dispensaries are finding it difficult to profit from the flower as anticipated. According to the Motley Fool:
In May, the state extended a moratorium on the issuance of new cannabis licenses, allowing big cannabis players in the state to purchase the majority of licenses available. Furthermore, there are no limits on the number of plants a facility can grow in Colorado, which has allowed these bigger businesses to boost production and essentially flood the market with marijuana, even if demand for the product isn’t there.
(Understandably, we can’t quite fathom the meaning of those final six words, “demand for the product isn’t there”…but they were in the quote. Perhaps an inside joke, or a foreign expression of some sort…?)
In any event, in markets like Colorado it’s likely that prices of cannabis will continue to plunge as more and more companies continue to produce. If dispensaries aren’t savvy with edibles or extracts, they may find it hard to navigate this newly oversaturated scene to a successful and profitable position. However, crafty cannabis lounges and getaways are staying on top by marketing to the consumer in a unique way, offering not only the herb but also an experience. As other markets open and expand, this cluster of green businesses may find themselves laying down roots in other areas of the country as the law allows. In the meantime there’s definitely more than enough bud to go around for everyone!
ABOUT THE AUTHOR
Garyn Angel is an inventor, award-winning financial consultant, and CEO of MagicalButter.com, maker of the botanical extractor he invented for infusing cannabis into foods. Firmly committed to needed legal reform, Angel was named to the exclusive CNBC NEXT List of visionary global business leaders for his work on legal marijuana. He is also founder of the Cheers to Goodness Foundation, a charity that helps “medical refugees”—mainly veterans and children—who need herbal therapy when traditional treatment options have failed.