DENVER (CBS4) – A new survey shows that as the number of recreational marijuana users increases in Colorado, the prices for pot are actually getting less expensive.
According to a report from global brokerage services company Convergex, the price for an 1/8th ounce of recreation marijuana in Colorado has dropped as much as 40 percent.
“Since last June, the average price of an 1/8th ounce of recreational cannabis has dropped from $50-$70 to $30-$45 currently; an ounce now sells for between $250 and $300 on average compared to $300-$400 last year,” Nicholas Colas, Chief Market Strategist for Convergex, said in his report.
The report cites more competition and expansion of grow facilities as a contributing factor in the price decline.
“But it is also a natural result for any maturing industry as dispensaries try to find the market’s equilibrium price,” Colas said.
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Colas says recreational marijuana sales during the first four months of this year exceeded last year’s.
“Given our revenue estimates for January through April, we expect stores to gross up to $480 million this year collectively.”
Dispensaries are also turning to increasing their promotions to retain customers and gain market share. Dispensaries are offering deals because the taxes are so high.
The report also noted that the industry is expanding by introducing recreational marijuana in other realms of business, such as outdoor activities, cannabis-themed activities, food and others. The report says marijuana-friendly businesses are an example “of entrepreneurial ventures blossoming in the Centennial state since Amendment 64 first allowed licensed stores to sell to anyone over the age of 21.”
Despite all the growth of the recreational marijuana industry, dispensary business still ebbs and flows like other retail stores. Business picks up during the holidays and then drops off until consumers get their tax refunds — and other similar retail trends.