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Is Colorado cannabis industry dying or just returning to normal?

by Travis C | Jul 28, 2022 | Blog, Business, Cannabis Business, Cannabis News, Culture, Editorial, Legalization

The Colorado cannabis market that thrived during the peak of the COVID pandemic has been slowly coming back down, decreasing 32% since the state broke records in July of 2020.

Colorado cannabis sales broke $226 million in July 2020 alone, setting a new record for the state. Latest state records show that total cannabis sales in the state for May 2022 were just $147 million.

At first glance this could be interpreted as the market correcting itself following the massive boost it received during the COVID pandemic. It could also be seen as the Colorado cannabis market losing marketshare following the legalization of cannabis in neighboring states like New Mexico and Oklahoma.

This answer is likely a combination of both.

During the peak of the pandemic, cannabis sales rose to record levels across the country. While many restaurants and stores shut down for months, in most states with recreational and medical cannabis, dispensaries remained open.

Cannabis was treated similarly to alcohol in this instance; liquor stores were allowed to remain open in most states during the pandemic as well.

The picture of Colorado’s cannabis industry profits becomes less pessimistic when taken in context and compared to pre-COVID numbers. However the numbers still show an industry that is struggling to grow as the national industry also grows and consolidates.

For comparison, let’s take the same month that we can consistently track according to state released data; May.

In May 2019, total Colorado cannabis sales were $143 million. One year later in May 2020, the state sold over $192 million in cannabis, which would gradually increase month by month until the record breaking month of July 2020 ($226 million).

It is easy to see the boost that COVID gave to cannabis sales in Colorado, as in May of 2021 sales were back down to $194 million. This number is just $2 million more than the same month in 2019.

Comparing to 2019 and removing 2020 from the equation, May 2019 to May 2022 show almost no growth.

Coincidentally, July 2021 was also one of the most successful months of the year, selling $202 million in cannabis products. The industry has not broken $200 million in sales since then.

As an additional comparison, we can look at the same 5 month timeframe from this year (2022) and last year (2021), from January to May.

The mean cannabis revenue in Colorado in 2021 from January to May was $192 million.

The mean cannabis revenue for 2022 is $151 in the same time period.

For a pre-COVID reference, sales for the same period in 2019 were only $133 million.

In other words, while Colorado cannabis sales are down compared to previous quarters, the industry has overall seen growth. The boost the industry gained from COVID has had residual impacts, with more people still purchasing cannabis than before the pandemic.

However the state has not seen a booming month like July 2020 for some time. Current trends in the industry hint that it is unlikely the state will see sales numbers surpassing $200 million until the next holiday season, if ever again.

Denver gives first cannabis transporter license to felon who trafficked plant

by The Real Dirt | Jul 23, 2021 | Blog, Business, Cannabis Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Culture, Industry News, Legalization

first cannabis transport license issued in Colorado

Two days after Denver issued its first-ever cannabis delivery license to a dispensary, the first transporter license was granted to a company whose co-founder suffered legal consequences for trafficking the substance decades ago.

Ari and Karina Cohen, co-founders of the cannabis transportation company Doobba, were awarded the license Thursday.

Applicants who qualify for Denver’s social equity designation are the only ones who can apply for cannabis transporter permits until July 1, 2024. After that, licensed cannabis stores can conduct their own delivery services.

Established cannabis stores must obtain a delivery license and they must contract with a transportation license holder until the July sunset date.

Ari qualified as a social equity transporter because he was convicted of a cannabis-related felony about 30 years ago, Karina confirmed.

“Our business model is to partner with very specific dispensaries,” she said. “Our biggest thing in this whole journey is to end cannabis prohibition.”

Colorado law specifies social equity applicants must meet one of three criteria as well as have at least a 51 percent ownership of the company.

The applicant must have lived in the state for at least 15 years between 1980 and 2010 in a census tract designated as an opportunity zone or disproportionate impacted area; or they, a parent, guardian, sibling, spouse or child were arrested, convicted or subject to civil asset forfeiture related to a cannabis investigation; or the applicant’s yearly income the year prior did not exceed 50 percent of the state’s median income.

She said Doobba has been talking to at least three cannabis companies about partnering with them for delivery services, and the company will start with two drivers.

Cohen said she’s not sure when her company will finalize a contract with a dispensary, but that she hopes to do so within the next couple of weeks.

She also said Doobba intends to help other social equity applicants navigate the licensing process because “it can be confusing.”

“Ari and I both have a lot of business acumen, and we want to pay it forward and help others stand up and be successful,” Cohen said.

Strawberry Fields received the first delivery permit for a licensed cannabis business on Tuesday, and representatives said they have been in talks with Doobba.

Read Full Story on Business Den

Denver grants first cannabis delivery license

by The Real Dirt | Jul 21, 2021 | 420 News, Blog, Business, Cannabis Business, Cannabis Law and Compliance, Cannabis News, Culture, Industry News, Legalization

Ever had one of those lazy days where you don’t want to get off the couch, even to buy cannabis? Soon, you won’t have to.

Strawberry Fields, a marijuana cultivation company with five Colorado dispensaries, including one at 3453 S. Yosemite St., was awarded Denver’s first cannabis delivery license Tuesday.

“I think it’s going to open up a lot of different avenues and outlets, more availability for our (medical cannabis) patients and consumers,” said Ethan Shean, chief retail operations officer for Strawberry Fields.

The service will not be immediately available, however.

Retail cannabis outlets must contract with companies that have obtained a cannabis transportation license, and none of those have been issued, although city officials told BusinessDen those applications could be approved within the next couple weeks.

Shean said the ability to deliver products will help Strawberry Fields connect with homebound medical cannabis patients and to people who have limited transportation.

“That is part of the inclusion that we want,” Shean said. “The customers and the patients who may not have access to come to one of our locations could be patients who rely on public transportation. We want to be accessible and convenient.”

Strawberry Fields opened in 2010 as a medical dispensary before adding recreational sales when it became legal in Colorado. The company is in communication with a few people who have applied for cannabis transportation licenses, Shean said.

State law governs how much cannabis can purchased per day, which is up to one ounce of “flower” per person or eight grams of concentrate with more than 800 milligrams of THC.

The city of Denver will only allow people who qualify as a “social equity applicant” to apply for medical and retail cannabis transportation licenses until July 1, 2024. Transporters can contract with multiple cannabis stores for their services. Deliveries must take place between 8 a.m. and midnight.

Existing retail and medical cannabis stores must contract with transportation licensees until July 1, 2024. After that, licensed dispensaries will be able to conduct deliveries themselves.

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Denver opens applications for cannabis delivery licenses, consumption lounges

by The Real Dirt | Jun 28, 2021 | 420 News, Blog, Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Industry News

Denver cannabis delivery licenses are being accepted now

Applications are now open for marijuana delivery and transporter licenses in Denver for the first time in the city’s history, the Department of Excise and Licenses announced.

The city is also accepting applications for new marijuana store locations for the first time since 2016, in addition to applications for marijuana cultivation and manufacturing licenses.

This comes two months after Denver changed its marijuana policy to allow for social equity delivery and hospitality businesses where patrons can consume marijuana on the premises. Applications for the hospitality business licenses are expected to open in November, the department said.

“This is a big part of the biggest overhaul in marijuana rules and regulations since initial legalization that the mayor signed into law on 4/20,” said Eric Escudero, spokesman for the Department of Excise and Licenses.

Under Denver’s new marijuana policy, there is no cap on the number of licenses and permits available, and there is no deadline to apply.

Delivery licenses will only be available to social equity applicants until 2024. Licenses for stores, transporters, cultivations, manufacturing and the new hospitality establishments will be limited to social equity applicants until 2027.

Social equity applicants are defined as Colorado residents who have never had a marijuana license revoked and meet one of the following social equity criteria:

Applicant lived in an opportunity zone or a disproportionately impacted area between 1980 and 2010
Applicant or immediate family was arrested, convicted or suffered civil asset forfeiture due to a marijuana offense
Applicant’s household income doesn’t exceed 50% of the state median income

By providing exclusivity to social equity applicants, Denver officials say they are trying to make up for the damage caused by the War on Drugs and the unequal persecution of disadvantaged communities for marijuana offenses.

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Colorado Hemp and Marijuana Growers at Odds Over Proposed Cannabis Farming Law

by The Real Dirt | May 31, 2021 | 420 News, Blog, Business, Cannabis Law, Cannabis Law and Compliance, Cannabis News, Growing, Hemp, Hemp Law

Colorado hemp and marijuana growers can't agree on new legislation to help farmers plan for weather

A bill in the Colorado State Legislature attempts to cut outdoor marijuana farmers some slack in the face of bad weather and reduce cross-pollination between marijuana and hemp grows. However, not all of the Colorado hemp industry is on board yet.

House Bill 1301 — a beefed-up version of a similar bill last year that was postponed due to the COVID-19 pandemic — would allow outdoor cannabis growers to create a contingency plan to prevent crop loss during extreme weather conditions. The measure would create working groups to reduce cross-pollination between marijuana and Colorado hemp plants, as well.

Home to spontaneous weather, Colorado is more than capable of an untimely freeze for outdoor cannabis farms, which only harvest once per year, during the fall. Representative Daneya Esgar, the prime bill sponsor, says that these farmers deserve more protection for such financial impacts.

“This bill was introduced last year in response to outdoor grows having very stringent regulations and losing millions of dollars because of adverse weather,” Esgar told her colleagues on the House Finance Committee during HB 1301’s first successful vote, on May 24. “We’re just bringing it back and making it better than it was.”

The best practices to prevent crop damage from bad weather would be created and enforced by the state Marijuana Enforcement Division, according to Esgar’s bill.

The other outdoor cannabis issue HB 1301 hopes to address — cross-pollination between plants — could be more polarizing among farmers. Although marijuana and hemp are regulated and grown differently, they’re still of the same plant genus and can easily cross pollinate miles away from each other if grown outdoors. Marijuana plants grown for THC content are feminized and don’t have seeds, just like hemp grown for CBD. However, industrial hemp grown for grain and fiber is full of seeds and pollen, which can pollinate seedless cannabis plants, including hemp.

“We’re trying to figure out how we can educate everyone, because there are some unintended consequences of cross-pollination,” Esgar said.

When cross-pollination between marijuana and hemp occurs, a handful of problems with regulations, including loss of yield and profit, are presented, according to Zack Dorsett, a Colorado hemp farmer for Blue Forest Farms in Longmont.

“It’s so bad,” he says in an interview with Westword. “We had a neighbor one year that grew un-feminized seeds and was spraying pollen all over the place, and the whole crop pretty much got ruined that year.” Hemp can also be harmed in the cross-pollination process, with some Colorado hemp crops testing above the federal THC limit of 0.3 percent after being pollinated by other cannabis plants.

There is pushback against the bill from some hemp industry members, however.