Colorado Cannabis Sales Take Nosedive; Denver Among Hardest Hit

The guinea pig of adult-use cannabis legalization in the U.S., Colorado is now facing the sharpest downturn in the nation, according to finalized 2022 sales figures recently released by the state’s Department of Revenue (DOR).

Licensed Colorado retailers recorded nearly $1.8 billion in adult-use and medical cannabis sales in 2022, a 21% decline compared to the more than $2.2 billion in sales recorded the previous year, marking the first time overall retail figures took a step back since a commercial adult-use launch in 2014.

*Source: Colorado DOR

That 21% year-over-year decrease represents the steepest market correction in the in U.S., shadowing the likes of Oregon’s 16% downturn and Nevada, which is on pace for a 15% downturn based on data through November, according to the state’s Department of Taxation.

Market maturity, oversupply and pricing are primary contributors to those states’ 2022 sales struggles, Headset data analysts Cooper Ashley and Mitchell Laferla recently told Cannabis Business Times.

“[We] also believe that both Colorado and Oregon had some of the largest sales surges during the pandemic, so, in a way, they had the furthest to fall in the market correction,” the analysts said.

RELATED: Year-Over-Year Cannabis Sales Shrink for First Time in 5 States

In addition to its market age, Colorado’s cannabis sales per capita are traditionally the highest in the nation. In 2021, for example, Colorado’s per-capita sales estimate of $429 for its 21-and-older population topped the chart, according to a CBT analysis of states with expanded markets.

Much of Colorado’s front-runner status in the sales-per-capita category is directly tied to the state’s most densely populated area, Denver, a consolidated city and county of roughly 707,000 people.

But Denver’s retail market was among the hardest hit by 2022’s market correction. For the year, Denver retailers recorded $475.5 million in adult-use and medical cannabis sales, representing a 30% decrease compared to the $682 million in sales from 2021, according to DOR data.

El Paso, Colorado’s most populous county of roughly 723,000 people, experienced a 35% decline in year-over-year medical cannabis sales. That county includes Colorado Springs, the state’s second most populated city, where voters turned down a November 2022 ballot measure to allow adult-use sales.

Most of Colorado’s other most populated counties were vastly below the state’s 21% year-over-year sales decline average:

Overall, Colorado’s 10 most populated counties—among 64 counties in the state—accounted for more than 75% of the state’s cannabis sales in 2022. Those counties also represent roughly the same percentage of the state’s overall population.