Colorado Marijuana Prices Rise for First Time Since 2021 — Sort Of

After sitting at record lows since last October, Colorado's marijuana prices are finally trending upward. Sort of.

Buoyed by strong performances during the COVID-19 pandemic, this state's dispensaries broke $2.2 billion in sales in 2021, but since then, the Colorado pot industry has been in a downward spiral. Wholesale marijuana prices hit bottom last July and stayed there for almost a year, according to state data, and dispensary sales dropped 21 percent from 2021 to 2022.

The down market has led to business closures and job cuts, with the state's marijuana workforce dropping almost 30 percent from 2022 to 2023. But in the Colorado Marijuana Enforcement Division's latest memo on marijuana prices, growers and dispensaries finally got a morsel of positive news.

According to the MED, the average market rate (AMR) for a pound of retail marijuana flower increased about 8.3 percent from April to July, from $649 to $703. This is the first bump in nearly two years for wholesale flower prices — but the Colorado pot industry isn't breathing a sigh of relief just yet. July's numbers for wholesale flower still represent a 60 percent dip from the $1,721 growers commanded in 2021.

Also, the AMR actually measures median prices of various wholesale marijuana categories, despite including "average" in its name. Still, the AMR's drop last year mirrored lower prices at dispensaries, even if there are outliers.

"The market average definitely affects all the wholesale game. Only products in higher demand have the ability to demand better prices," says grower Malek Noueiry, who owns wholesale cultivation Malek's Premium Cannabis.

The increase in wholesale prices comes on the heels of hundreds of marijuana business closures in Colorado. According to the MED, the number of marijuana business licenses dropped from more than 3,500 in 2021 to around 2,700 as of last month, with the majority of expired licenses for growing operations. All of those closed growing operations could be dropping the price in a different AMR category, though.

On top of wholesale flower prices, the state monitors marijuana trim and plant matter allocated for extraction, as well as whole wet plants, which are used to make popular "live" extractions such as resin and rosin. According to the July AMR, the price for trim allocated for extraction has dropped almost 20 percent since April, to $41 per pound, while the price of whole wet plants stayed flat at $82.

But the AMR for bud allocated for extraction, a popular category for growers who are trying to quickly liquidate product, plummeted by more than 183 percent, from $405 to $143 per pound. Products made from hydrocarbon extraction, such as shatter, wax, distillate and infused joints, are common results of bud allocated for extraction.

This isn't the first time bud allocated for extraction has fluctuated heavily, MED data shows. In 2021, the AMR for the category went from $525 to $901 and then back down to $405, all in the span of six months.