Overcapacity Drives Down MJ Prices In Colorado
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Overcapacity Drives Down MJ Prices In Colorado
Posted by CN Staff on September 30, 2015 at 06:46:51 PT
By Debra Borchardt, Contributor
Source: Forbes
Colorado -- Overcapacity in dispensaries in Colorado is driving down marijuana prices. Retail prices for marijuana have dropped in the third quarter, according to a marijuana store survey by Nicholas Colas, chief market strategist with Converge.Colas surveyed retail outlets in Colorado and found that marijuana prices fell from $50-$70 for an eighth of an ounce to $30-$45. An ounce fell from $300-$400 to the lower end of $300 an ounce. Colas found that all of his contacts said that greater competition was the reason for the pricing pressure as more retail dispensaries and grow facilities were opened.
“To put this in perspective, there were 156 retail marijuana stores and 204 retail marijuana cultivation facilities at the beginning of 2014, according to the Colorado Marijuana Enforcement division,” wrote Colas. “At the end of December 2014, there were 322 retail stores and 397 retail cultivations respectively.” As of August 3rd, that number has increased to 385 retail stores and 496 retail cultivations, a 20% and 25% increase respectively.The prices seemed to have stabilized, but Colas notes there are some stores that will sell an ounce for $200. The survey participants told Colas that they have to drop prices to compete.On a positive note, business is good and customers are increasing. The stores said that they’ve gone form a range of 100-300 customers a day to 150-350. Summer is a busy season, as well as holidays and weekends. Just as Wal-Mart sees its business jump on payday, so do the marijuana stores. Business is good on the first Friday and the 15th of the month.Sour gummies remain the top edible choice amongst the respondents and vaping cartridges are growing in demand. The products are described as evolving and while it takes longer to feel the same effects as smoking marijuana, customers like the lack of smell and find it easier to use.As competition increases, store owners are getting more creative. According to Colas, a new Gas and Grass business will open in two locations in Colorado next month. Like any other gas station that sells cigarettes, these establishments will also sell medical marijuana. There will even be loyalty programs. It was noted that they will operate independently, so people getting gas don’t have to be patients and vice versa. But it does allow for convenience and Coloradans have quickly adapted to marijuana sales as just another retail product.With all this competition, it seems like it would be harder to make these stores profitable. Colas said that by reviewing the tax data from the Colorado department of revenue, he determined that stores probably earn $58 million in revenue, a 97% increase over last year.Like any properly functioning market, the law of supply and demand rule. Even if the product is cannabis, too much supply brings down the price.Source: Forbes Magazine (US)Author: Debra Borchardt, ContributorPublished: September 30, 2015Copyright: 2015 Forbes Inc.Contact: readers forbes.comWebsite: -- Cannabis Archives 
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Comment #8 posted by Sam Adams on October 02, 2015 at 11:52:16 PT
nice! I didn't even catch that! I wonder if anyone's pointed that out to him. I hope that someday prohibition goes away enough that the central american countries can start growing the tropical sativas again. It would be amazing to get some of those landrace strains. There was an article recently saying that a CO company is collecting landrace seeds from around the world.that's great, but it's very difficult to grow 100% tropical sativas anywhere but outdoors near the equator.  Many of the flowers currently sold in US flower shops come from growers in central america. With modern transportation they could just as easily bring cannabis flowers up, nice and fresh.
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Comment #7 posted by Paint with light on October 01, 2015 at 23:00:27 PT
Love the guy's last name
Colas.....from weed wiki.....A cola or "bud site" is the part of a female cannabis plant where the flowers or buds grow together tightly. In plant physiology, this is known as the terminal bud.I'm glad terminal bud is never terminal.Legal like chicken.
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Comment #6 posted by Paint with light on October 01, 2015 at 22:53:19 PT
70's prices
I sold oz's for 15 until around 1977 when we started getting a lot of Columbian.My favorite was called Columbian red tip. I have tried to preserve some seeds from that. I got some to germinate 15 years ago.Columbian oz's came in at 40 and Mexican went to 20.They stayed there until the indica strains came along.Legal like alcohol.......let me grow my own.
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Comment #5 posted by The GCW on October 01, 2015 at 05:51:48 PT
Somewhat related election info / Nov 3, 2015
(FoM, I don't know how to shorten that address below and if You are able, that would be fine.)Nov. 3, 2015 Colorado election "Proposition BB"Final DraftFiscal impact if Proposition BB fails. If Proposition BB fails, the state will be required to refund $66.0 million* in state budget year 2015-16. The refund will occur as follows:
􏰀 􏰀
$25.0 million, averaging $8 per taxpayer, will be refunded to all year-round resident taxpayers on 2015 state income tax forms; $24.0 million* will be refunded to retail marijuana cultivators; and $17.0 million* will be refunded via a temporary reduction in the retail marijuana sales tax rate from 10.0 percent to 0.1 percent effective January 1, 2016. The rate reduction will continue until taxes are reduced by $17.0 million.*Additionally, the local government share of retail marijuana sales tax revenue will be cut from 15.0 percent to 7.5 percent until the local government share is reduced by $6.3 million,* the amount that local governments received in state budget year 2014-15.$FILE/Final%20Draft%20Packet%20Proposition%20BB.pdf-0-For Colorado citizens who believe the tax consumers pay for cannabis is too high, this could lower that rate.Keep in mind, this Proposal BB does not remove the tax but simply gives back tax that has gone above and beyond original projections. State still keeps what they originally expected to receive.-0-And a news article about it in Westword:INSIDE PROPOSITION BB, WHICH WOULD LET STATE KEEP EXCESS MARIJUANA REVENUES
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Comment #4 posted by kaptinemo on September 30, 2015 at 18:29:26 PT:
And you can just hear the prohibs grab their guts
and scream. Low priced pot! The sky will turn bright maroon, or something. Any wonder why the cartels have given up on growing cannabis?
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Comment #3 posted by Sam Adams on September 30, 2015 at 09:56:23 PT
oversupply or adequate supply? The real price of outdoor cannabis should not be more than $50 per ounce.  There's going to be a period where people that aren't good at running a business are run out of the cannabis industry.I remember the internet boom of the late 90's - there were hundreds of new companies in areas that could only support 2-3 companies. In the end the vast majority of intenet content companies went belly up.Survival of the fittest. It's a cruel world out there in business, but that's what freedom looks like. And that's what delivers the best product to the consumer for the best price. also the numbers are way high in this article, the last time I checked websites prices ranged from $100 to $300 per ounce. On the way down and it's not going to stop.
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Comment #2 posted by TroutMask on September 30, 2015 at 08:36:22 PT
...and about those "gas stations selling grass&quo
It's grass stations selling gas. There are few restrictions on what you can sell at a dispensary and gas is not excluded. But they make it sound like a gas station decided to sell marijuana, which is not accurate.
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Comment #1 posted by TroutMask on September 30, 2015 at 08:34:39 PT
Bought some pot.
My wife and friends visited their first dispensary here in Colorado. I still haven't been to one yet. They each bought an ounce at $150. I was getting that or more when I was growing. Will we see the $30 ounces of the 70's??
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