"On Jan. 1, 2014, Iraq War veteran Sean Azzariti made headlines worldwide as the first person in the U.S. to buy legal weed.
More than 10 years later, 3D Cannabis Center, the #dispensary in #Denver’s Elyria-Swansea neighborhood where the historic purchase was made, displays a makeshift sign announcing it is “temporarily closed.” The windows and doors on the side of the building have been boarded up. Plastic bags, discarded coffee cups and other trash collect in the corners of the abandoned parking lot.
The dismal state of the historic site is a fitting symbol of the plight of Colorado’s #cannabismarket. What once was a success story has now left a trail of failed businesses and cash-strapped entrepreneurs in its wake. Regulatory burdens, an oversaturated market and increasing competition from nearby states have all landed major blows, leaving other states with newer #marijuanamarkets scrambling to avoid the same mistakes.
For years, Colorado’s marijuana market minted successful local entrepreneurs who bootstrapped small businesses into #nationalbrands. The market drew aspiring cannabis professionals from across the country, whether ambitious college grads with a business idea or investors looking to get in on the green rush.
In 2020, the market soared to $2.2 billion. But just three years later, sales had plummeted to $1.5 billion, leading to layoffs, closures and downsizing. The market downturn has spelled trouble for state finances too: Colorado took in just $282 million in cannabis tax revenues in the last fiscal year, down more than 30 percent from two years earlier.
A messy assortment of factors has led to the pioneering industry’s struggles. A supply glut caused weed prices to plummet in the wake of the pandemic. The spread of cheap, largely unregulated intoxicating hemp-derived products further heightened competitive pressures. And marijuana remains federally illegal, subjecting operators to sky-high taxes and costly regulations.
“It’s like the wind in our cannabis sails in Colorado has just been sucked all the way out,” said Regent Wanda L. James, founder of Denver dispensary Simply Pure, one of the first recreational dispensaries in the state.
But more than any other factor, Colorado’s market has been sapped by the rapid spread of legalization across the country. Neighbors New Mexico and Arizona are among the 24 states with their own adult-use legal marijuana markets, wreaking havoc on the business plans of dispensaries on Colorado’s southern border. #Tourists who once flooded the state for the opportunity to legally experience #RockyMountain highs have largely disappeared as the novelty has worn off. Even Texans aren’t driving north to buy weed anymore, satisfied with the proliferation of intoxicating hemp products in their own state." - POLITICO
