Sounds pretty good, right? In almost two years of recreational sales, Colorado is experiencing the pros and cons of supply and demand. In a recent study conducted by Convergex, a global brokerage company, it is apparent that the price of weed has dropped pretty dramatically.
According to the Convergex survey, “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. More competition and expansion of grow facilities contributed to this price decline, but it is also a natural result for any maturing industry as dispensaries try to find the market’s equilibrium price.”
Furthermore, the average amount of money spent per transaction is about half that of last year, however the number of people visiting the shops has increased. Convergex contributes this trend to the novelty of legal weed wearing off, and tourism only accounting for 10% of overall sales.
It is interesting to note that while prices are falling, Colorado’s recreational sales are exceeding those of last year. In fact, Colorado stores are expected to gross up to $480 million this year, which is a 50% increase over 2014. With legal weed projecting to be a 30 billion dollar industry in the next 5 years, it seems that Colorado is leading the way.