It’s been a little over a year since Colorado began allowing stores to sell marijuana for recreational use and the market continues to grow rapidly.
Since last June, the average price of an 1/8th ounce of recreational cannabis has dropped from $50-$70 to $30-$45 currently; an ounce now sells for between $250 and $300 on average compared to $300-$400 last year.
More competition and expansion of grow facilities contributed to this price decline, but it is also a natural result for any maturing industry as dispensaries try to find the market’s equilibrium price.
Even with the declining prices, sales are still exceeding those of last year for recreational marijuana.
According to the note, sales increased by 98 percent year-over-year in April. Taking that into account, Colas expects stores to gross up to $480 million this year, which would be a 50 percent increase over 2014.