Even as the market for recreational marijuana in Colorado continues to grow, it appears that the cost of marijuana is actually declining.
The increased competition among dispensaries and the larger number of grow facilities are one reason that statewide marijuana prices seem to be going down. Over the 18 months since recreational use was legalized, more and more dispensary licenses have been handed out, which has helped to eliminate the high prices that the limited number of dispensaries were originally able to offer.
According to Convergex, a global brokerage services company, an ounce of marijuana has lowered in price from between $300 and $400 a year ago, to $250 to $300 currently. The price for an 1/8th of an ounce from recreational shops has dropped up to 40% throughout Colorado.
The Colorado Department of Revenue has reported $4.39 million in tax revenue from recreational marijuana sales in April 2015. The estimated total of $43.9 million in total sales for April shows a 98% increase over the past year. The Convergex report projects the 2015 total revenue to be $480 million, which presents over a 50% rise compared to the 2014 total.
Nicolas Colas, Convergex’s chief market strategist, believes these results are a “natural result for any maturing industry as dispensaries try to find the market’s equilibrium price.”
Convergex’s survey reported that between 100 to 300 customers entered the monitored stores each day, but only spent an average of $50 per visit, compared to $100 a year ago.
Recent legislation in the Centennial State will provide consumers with a one-day tax holiday on recreational cannabis purchases. After this one-day tax break, on September 16, the state sales tax will be permanently lowered to 8% as an attempt to eliminate the black market still found around Colorado.