COLORADO, USA — Marijuana cultivators in Colorado are feeling the pinch of declining wholesale prices for their product, forcing some out of business and others to diversify into side business prospects that provide a more reliable source of income.
Monday's release of the state's October and November marijuana tax and sales figures showed a continued drop in a yearlong decline in sales, marijuana industry groups said.
October saw 20% less revenue from marijuana sales compared to the year before. The wholesale price of a pound of marijuana dropped by nearly half from October 2021 to about $650 per pound, according to data from the state.
"I think it was just a matter of oversaturation. A lot of people got into the game and got into the industry." Vontrez Wilson, grower and owner of cultivation company Optimum Grow, said.
He began his business in 2020 when the marijuana market was booming. But the supply glut happening now has hit cultivators like him hard.
"The dispensaries aren’t being hit as hard. They’re still moving product. They’re still able to hit their margins," he said. "There was more product being produced than there was demand. And that’s simple business at that point."
Wilson said about 40% of the growers near his operation in Southeastern Colorado have already folded.
"Folks next door to us aren't there anymore," he said.
To keep business balanced, he's diversifying into merchandise -- with hats, t-shirts and hoodies for sale with his brand across the front. Wilson said he knows exactly how much he'll make per sale of those items -- and it adds to his brand, which he hopes will eventually make more people want to buy his weed.
"If you are able to make it through these times right now, it only goes up from here," he said.
Wilson said he expects it could be another year and a half before the price stabilizes as other growers go out of business. He's hoping he's not one of them.
"It can make you nervous. It can be nerve-wracking," he said.
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