The Colorado Marijuana Enforcement Division (MED) has published its 2019 Annual Update, providing licensing, sales, production, and product testing data for the entirety of last year. Interestingly, flower production expanded as purchasing declined, yet wholesale prices in the state increased, nonetheless. Some flower was undoubtedly directed toward extraction to manufacture concentrates and infused products. The former saw a significant increase in sales in 2019 compared to the year prior. Additional wholesale price data for Colorado – and other states – in 2019 can be found in our recently published 2019 Annual Chart Book.
Colorado’s legal cannabis market generally contracted in terms of the number of active licenses in 2019. The major exception was an increase in the number of adult-use retail licenses, from 549 at the end of 2018 to 572 at the end of 2019. The numbers of licenses active for adult-use product manufacturing facilities and testing labs were also up slightly in the same period. The number of adult-use cultivation licenses decreased to 684 at the end of 2019, down from 735 at the end of 2018. Medical cultivation licenses saw an even larger contraction, but as we have noted in prior reports this was due in part to multiple permits at single addresses being collapsed into single licenses as part of a rule change.
Despite both adult-use and medical cultivation licenses decreasing over the course of 2019, the number of total plants cultivated in both sectors of the market was up compared to 2018. Adult-use cultivation capacity was consistently higher in each month of 2019 compared to the same month the year prior. On the other hand, medical cultivation was down year-over-year through the first six months of 2019, but the number of plants grown by medical growers rose to over 300,000 monthly in the second half of 2019, a threshold that was not surpassed in all of 2018. By December 2019, Colorado cultivators were growing almost 1.08 million total plants at any given time, on average, up about 10% from the same point the previous year.
Along with increased numbers of plants being grown, production of flower, trim, and wet whole plants increased significantly in 2019, although nearly all the expansion took place on the adult-use side.
Pounds of Usable Marijuana by Category Produced in 2019
While total flower production grew in 2019 compared to the year before, the amount of flower purchased by consumers and patients contracted notably. In 2019, consumers and patients bought 350,429 pounds of flower, roughly half the amount produced and down by 19.7% from over 436,000 pounds purchased in both markets in 2018. Proportional reductions in flower purchasing in the adult-use and medical sectors of the market were comparable to the overall downturn.
The MED’s update shows that adult-use consumers shifted to purchasing increased amounts of edibles and concentrates in 2019, while registered patients increased their purchases of concentrates, but not edibles. Total pounds of concentrates sold expanded by 18.4% year-over-year. Most of the uptick occurred in the adult-use market, which saw a 27.5% increase in sales volume from 2018 to 2019. Units of concentrates sold increased by 47% from 2018 to 2019, indicating that product manufacturers are packaging such items in smaller increments. Again, most of the growth in unit sales occurred in the adult-use sector. Additionally, adult-use consumers purchased roughly six times the number of units of concentrates that medical patients did in 2019.
Total units of edibles sold rose by 12.1% from 2018 to 2019, from over 12.7 million to over 14.3 million. The overall growth in sales for edibles took place in the adult-use market, which saw an increase of 15.4% in the number of units sold. Units of edibles sold to medical patients decreased by 7.7% year-over-year in 2019.
Most products in Colorado’s legal market continue to clear the state’s required quality assurance and safety testing at very high rates, frequently above 95%. The major exception remains flower and trim failing microbial contaminant testing. In 2019, about 14% of batches of plant material in the adult-use sector failed this screening, along with 13% of batches in the medical market. Still, those failure rates are down slightly from 2018.