Overcapacity Drives Down Marijuana Prices in 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.

– Read the entire article at Forbes News.