Colorado's Legal Pot Boom Goes Bust

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Colorado’s legal marijuana business is at least one toke over the line as a massive decrease in sales has led to store closures and layoffs across the state.

Politico recently reported that Denver’s 3D Cannabis dispensary, where Iraq War vet Sean Azzariti became the first person to legally buy recreational marijuana, has “temporarily closed.” But the boards on the doors and windows and the dismal state of the parking lot make the closure appear much closer to permanent.

During the idiotic COVID lockdowns, when too many people had too little to do, Colorado’s pot sales jumped to $2.2 billion — a dramatic 25% increase over 2019’s $1.75 billion.

Sales held steady in 2021 because perhaps even my blue state needed some herbal aid adjusting to having sundowner Joe Biden in the White House. I kid — I think. But 2021 marked the end of weed’s steady sales growth since legalization began in January 2014. In 2022, sales cratered to levels not seen since the pre-COVID year of 2019.

Today, you’d have to go all the way back to 2016 to see pot sales lower than last year’s. This year’s sales are on track to be even lower than 2023’s. I’d add that these sales figures are not adjusted for inflation. Doing a rough 20% adjustment, pot sales in 2023 were actually lower than they were in 2016.

Gone are the days when Forbes contributor Robert Hoban was hyping “The Success Of Colorado’s Marijuana Tax Dollars.” Hoban then called legalization “a massive success and proof-of-concept for the future of the American cannabis industry,” and reminded readers that “it also accounts for billions in tax revenues for the state of Colorado.”

But sales are shrinking and with them, revenues. I’d add that the tax revenues were maybe not what some boosters told us they’d be. “Colorado collected just over $274.1 million in commercial marijuana taxes and licensing fees in 2023,” Denver’s Westworld reported in March, “and has tallied a little more than $43.5 through the first two months of 2024.”

For a state that spent $38.5 billion last year, $274.1 million in taxes — shared in part with local governments — doesn’t amount to much. It seems like a long time ago when the hippies were saying, “Just legalize it, man, and we’ll close the deficit!” But to be fair, the hippies were probably stoned out of their minds when they came up with that.

Politico blamed “a messy assortment of factors” for pot’s fizzle, including “the spread of cheap, largely unregulated intoxicating hemp-derived products further heightened competitive pressures. And marijuana remains federally illegal, subjecting operators to sky-high taxes and costly regulations.”

But weed was just as “federally illegal” while sales were booming, and “cannabis licenses in the state dropped more than 16 percent in the past year alone,” and “Curaleaf, one of America’s largest cannabis companies, said last January that it had shuttered its production and cultivation facilities in Colorado.” Lower productions and fewer dispensaries should have helped stabilize prices. People just aren’t buying like they used to.

Something has taken the bloom off the bud and no one seems to quite know what it is.

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