Colorado, once a trailblazer in the legal cannabis market, is now grappling with a significant downturn as sales have plummeted by a staggering $700 million over the past three years. The state, which saw peak revenues of $2.2 billion in 2020, witnessed a decline to just $1.5 billion in 2023, with far-reaching consequences for the state’s economy.
One of the most notable impacts has been the substantial decrease in cannabis tax revenues, which have fallen by more than 30% over the past two years, amounting to just $282 million in the last fiscal year. This sharp decline can be attributed to a combination of factors, including an oversaturated local market, burdensome regulations, and increasing competition from neighboring states such as New Mexico and Arizona.
The allure of Colorado’s legal cannabis market has also waned for tourists, who once flocked to the state to experience the novelty of legally consuming marijuana. Even Texans, who previously made border runs to purchase weed, are now satisfied with the abundance of intoxicating hemp products available in their own state, leading to a nearly 50% drop in sales in Colorado’s southern border counties since their 2021 peak.
As the industry struggles to adapt to these challenges, the number of cannabis licenses issued has dropped by more than 16% over the past year, accompanied by a similar decline in cannabis-related jobs. This marks the second consecutive year of job losses within the industry, indicating a contracting market and a difficult road ahead for Colorado’s once-thriving cannabis sector.
