It has been a little more than a year since Colorado started permitting stores to start selling cannabis for recreational use and the market is currently expanding at a rapid rate. However, there are clouds on the horizon.
Nicholas Colas and his team at Convergex, is a international brokerage company based in New York, surveyed a number of cannabis dispensaries in Colorado this past week to obtain a better picture of the state of the nascent market.
what they revealed was that the cost of marijuana is declining quicker than some has assumed while the number of individuals visiting the dispensaries has increased
Since this past June, the average cost of 1/8th of an ounce of recreational marijuana has lowered from $50-$70 to $35-$45 as of now; 28 grams currently cost between $250 and $300 on average in contrast to $300-$400 this past year. A high volume of competition and expansion of grow facilities has played a role to this price decline, however, it is also a natural answer for any growing industry as marijuana shops try to find the markets middle ground price.
Even with the prices being slashed, sales remain exceeding those of this past year for recreational cannabis.
In reference to the note, sales increased by 98% year after year in April. Using that as a factor, Colas expects dispensaries to aggregate of close to $500 million this year, which would be a 50% increase over 2014.
One thing his team will be keeping their focus on is the average size of each trisection, as it shows to be decreasing maybe as the novelty value of legally buying marijuana wears out as well as a key upcoming date: Our resources still document between 100-300 customers entering their stores each day, however, they only buy 50 worth inventory compared to $100 this past June. The 10% sales tax on recreational marijuana will be repealed only on that day because of a provision included in a bill Colorado Governor John Hickenlooper signed into law earlier in the month of June. The bill as well will indefinitely cut the 10% sales tax on recreational cannabis to 8% in 2017 in an effort to squeeze out the black market.
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