Colorado's recreational marijuana market is now over a year old, and while it continues to grow, a new survey has found that pot prices are dropping faster than most expected.
According to global brokerage company Convergex, increased competition and the expansion of grow facilities are contributing factors in the price decline, but it's also "a natural result for any maturing industry as dispensaries try to find the market's equilibrium price."
"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," Convergex reported.
But Bloomberg Business noted that even with these declining prices, this year's sales of recreational marijuana are still exceeding those of last year and the number of people visiting dispensaries has increased.
"The state grossed $3.55 million in revenues from the 10 percent retail sales tax in January, which suggests stores earned $35.5 million in revenue," Convergex reported. "That’s a 153 percent increase from the prior year. Revenues in February and March grew by 164 percent and 126 percent on the year respectively, while sales rose by 98 percent year-over-year to $43.9 million in April."
According to the data, Colorado's pot shops are expected to gross up to $480 million this year—a 50 percent increase over 2014.
Also of note is that while people are still visiting dispensaries in droves, numbers indicate that customers are spending less with each transaction. Shops are reportedly still receiving 100 to 300 customers per day, but buyers are only spending about $50 per visit compared to $100 last June.