DENVER – Colorado’s besieged cannabis industry, which has seen sales plummet in 2023 by 11.5% according to the state’s Department of Revenue, will experience a rebound in the second half of the coming year as the market corrections stabilize and the economy improves. In addition, cannabis consumers in the state that long eschewed cannabis-infused beverages will finally embrace the product.
These are just two of the top predictions from leaders at Native Roots Cannabis Co. as Colorado celebrates the 10th anniversary of legalized adult-use cannabis sales in the state, which began in January 2014 following voter approval of Amendment 64 in 2013. One of the state’s most successful and longest-running cannabis operators, Native Roots Cannabis Co. was founded in 2010 and has helped shape the industry as it exists today. Despite the challenging conditions of the past two years, the industry continues to mature and evolve.
“There’s no question that legalization of adult-use sales has had a lot of positive impacts on the state of Colorado,” said Beth Kotarba, Chief Operating Officer of Native Roots Cannabis Co. “It has provided more than a billion dollars in tax revenue while helping countless citizens get better sleep, combat addiction and improve their overall well-being. While the industry still operates within a difficult regulatory and tax environment, we have continued to grow and legalization has primarily delivered a positive impact on our state.”
Colorado cannabis will rebound in Q3
Like in many states with maturing cannabis markets, Colorado’s cannabis operators faced a combination of challenges in 2023. Overproduction, reduced demand following the pandemic, price compression and a sharp decline in cannabis tourism all contributed to the downsizing experienced by some cannabis businesses. The reality is that older cannabis markets are experiencing the type of corrections often seen in nascent industries, but the complexities of the cannabis industry make these corrections even more burdensome. This environment will continue through the first two quarters of 2023, but the industry will rebound as these corrections stabilize.
“2023 has been one of the worst years since legalization. We’re seeing the industry right itself and while we want every business to be successful, the fact is that the market was oversaturated for our population size,” Kotarba said. “However, those who were prepared to weather the storm have done so, and as the economy rebounds, so will the cannabis industry. I think we will close out 2024 in a much better place than 2023. If we can get rescheduling or banking reform accomplished, it could be a landmark year and a turning point for the industry.”
Coloradans will finally embrace cannabis beverages
While still a relatively small segment of the overall cannabis market, cannabis-infused beverages have gained a following in many, if not most, states with adult-use cannabis markets. However, the exception to this rule is Colorado, which has experienced only average adoption of cannabis beverages. But the ongoing refinement of the consumption lounge concept, combined with advancements in infusion technology, flavors and potencies, has many industry observers hopeful that increased growth of the segment may be on the horizon.
“Cannabis tourism is no longer the novel idea that it once was, so finding ways of replacing that business segment will be significant and a huge opportunity for growth for those that can do it right,” said Kotarba. “Consumption lounges and beverages could be a big part of that opportunity. It’s no surprise that consumers are shying away from smoking, and many people are reducing their alcohol consumption while looking for more discreet ways to consume cannabis. Late 2023 trends are finally showing that Coloradans are getting on board with drinking their cannabis.”
Rescheduling or banking reform could define the industry’s next decade
There is almost no one in Colorado or elsewhere in the nation who believes full federal legalization of cannabis is anywhere on the horizon. However, the recent recommendation by the U.S. Department of Health and Human Services to reschedule cannabis, along with ongoing Congressional support for passage of banking reforms (i.e., SAFE Banking), is generating significant hope for progress in the coming year.
“One of the biggest challenges for the industry in 2024 will continue to be the lack of access to banking and financial services. Margins are razor thin, and as more and more states come online, this broken system needs to be fixed,” said Kotarba. “But I think we are seeing movement on rescheduling and maybe on banking reform, either of which would be huge wins and could become the new norm for the next 10-20 years of the industry.”
Native Roots Cannabis Co.: Colorado’s Happy Place
Native Roots Cannabis Co. is one of Colorado’s most successful vertically integrated medical and adult-use cannabis operators. Native Roots has 20 dispensary locations across Colorado, serving thousands of adult consumers daily and the state’s largest number of registered patient members. With over a decade of experience providing cannabis to patients and adult consumers, Native Roots has won national recognition for its sustainable business practices, retail design, high-quality products and employment practices. Since 2010, Coloradans have turned to Native Roots as their trusted leader in cannabis for wellness and recreation. Native Roots offers a vast assortment of affordable products and a welcoming environment for cannabis beginners and experts alike. Rooted in the community, we are Colorado’s Happy Place. To learn more about the company, visit nativerootscannabis.com. Follow Native Roots on LinkedIn, Facebook, Twitter and Instagram.