The Grass is Greener on the Other Side: Navigating Challenges for Today’s Cannabis Industry
Colorado’s world-renowned cannabis industry has taken a tumble since its peak in 2021. Dispensary doors are closing; brands are disappearing, and smaller local businesses cannot compete. Sales prices per gram are falling. The plant count is down. Growers are grasping to cope as career opportunities dwindle and workers are laid off.
If you’ve never thought twice about the role you play as a cannabis consumer as you spark up a joint—even if you’re not thinking much at all afterward—now is the time to do so.
Colorado ranked second among largest cannabis job losses just last year. Colorado’s industry, overbuilt and overgrown, is struggling to recover from competition with other states, issues with banking and financial challenges, lack of inclusivity, and ongoing problems posed by federal law and legalities.
Denver is home to 308 dispensaries which foster tax revenues empowering Colorado’s economy. Amendment 64 allotted Colorado and Washington with legalization rights, placing the decision-making into the power of local state governments. This once-underground business has accumulated $15.6 billion since Denver hosted the first ever legal sale of recreational marijuana on January 1, 2014.
Colorado has helped rebrand a drug in the public’s eye into something beautiful and beneficial. Weed has given countless individuals health benefits, from easing chronic pain, anxiety, and inflammation, to increasing general livelihood and enjoyment. It is now vital to work towards raising public awareness and recultivating an industry that has helped so many people.
Colorado’s sales and investor interest boomed during the COVID-19 lockdowns. Consumer demand skyrocketed as people sat at home with nothing to do but light up. As vaccine access spread, the demand softened, and industry vulnerability surfaced. The market had been rapidly flooded with new dispensaries during the pandemic. Unending growth became a pressing issue, as people came out of quarantine and supplies piled high while prices plummeted. Colorado has continued to grant new dispensary licenses—with 685 issued in 2023 alone—despite the loss of
businesses and the lack of demand. With too many dispensaries, cultivation, and products collecting dust, “Most companies I know are losing money, or they’ve shut down and scaled back,” says Renée Grossman, who opened High-Q, a small chain of dispensaries across Colorado. She is not alone in her views.
Competition with other states has been a driving reason for the decline of Colorado’s weed sales. Twenty-three other states have legalized recreational cannabis. As weed becomes commonplace, the spotlight shifts away from Colorado.
No longer holding exclusive reign on the cannabis industry means less tourism and decreasing revenues in an increasingly pressurized market. Strain and product competition furthers the divid; some compare the cannabis industry to the restaurant industry, competing to out-do and perfect.
Banking and financial challenges imposed on Colorado’s weed industry stem from a lack of access to traditional banking services and protection due to federal regulations. Dispensaries, largely cash-based, face security and financial management concerns. High, strict tax rates on weed impact the monetary success of cannabis business, as well as the state’s economy. These taxes have been vital to Colorado and local community revenues. Unstable taxation harms the programs which rely on cannabis taxes, specifically funding for construction, schools, and addiction treatment.
Cannabis remains illegal at the federal level. As a Schedule 1 drug, federal oversight and regulation is nearly nonexistent. This is disadvantageous for the industry, putting pressure on the state and its subsequent counties. The unpredictable economy mixed with denied interstate commerce and federal bankruptcy protections position the federal government as a rival to the cannabis industry. To add insult to injury, the weed industry does not receive federal tax breaks found in other industries on top of their hefty state tax burdens.
Social equity and inclusion is another pressing topic revolving around the struggling weed industry here. A lack of diversity and inclusion resultantly deters minority entrepreneurs. Although there have been efforts made to solve issues of social equity, the distribution of businesses remains heavily in the hands of the white majority. Gender disparities persist as well as disproportionate and unjust cannabis-related incarcerations of marginalized groups.
There is hope for Colorado cannabis despite the dwindling dank distribution and obstacles the industry faces. The future industry has the potential to offer licenses to hospitality establishments, public places to consume cannabis. Aurora introduced the idea of lounges, private clubs, and tasting rooms before being rejected due to rigid indoor air laws. But the facilitation of weed-friendly establishments could bring back revenue and tourism in Colorado.
There has also been talk of lowering the classification of cannabis to a Schedule III. This would aid the industry astronomically. With a little community effort, public recognition, and positivity, Colorado can combat these challenges and reignite the industry that has burned bright for so many years. The grass is always greener on the other side!
by Madeleine Farber
