For now, Hageseth and others are waiting for the point of equilibrium.
“You have to be agile and able to adapt quickly to the really rapidly changing environment,” said Monroe, who’s in the process of selling his 6-year-old indoor operation to industry giant Cannabis One Holdings.
Though some market indicators suggest Colorado’s cannabis climate may soon be fully baked, there are others destined to incite change. Lord expects to see continued consolidation in the space following a 2019 law that allows public funding in cannabis. That law enabled companies like Denver’s Medicine Man to acquire independent dispensaries and product manufacturers.
Still, many anticipate the wholesale cost will remain relatively flat in 2020. Or at least they’re hoping it will.
The average market rate slumped to a low of $759 per pound in 2018 after peaking at $2,007 per pound in early 2015. That rate has rebounded to $1,316 per pound this month, after five consecutive quarters on the rise, reaching the highest price in three years.
And any movement on the federal level, such as approval of SAFE Banking Act to allow marijuana businesses access to bank services, would surely have local implications.
“It’s become a very efficient market, so it’s pretty inelastic,” he said.
After low of $759 per pound in 2018, average wholesale marijuana price now back up to $1,316 per pound
And in an industry in which profit margins often are described as thin, thanks in part to federal regulation that prohibits cannabis businesses from taking substantial tax deductions, additional testing for things like heavy metals, required as of January, is expected to eat into the bottom line.
Entrepreneurs who broke into Colorado’s cannabis industry at the ground level — the growers — have endured economic whiplash over the last two years as the market for wholesale flower experienced volatile swings in price.
Colorado law allows residents to grow marijuana in their homes for personal use.
Marijuana, like alcohol, is a dual licensing authority which means that prior to conducting business there must be both a State License and a Local License.
Retail Marijuana licensing authority and requirements are contained in Ord. 1057 as amended.
Commercial Marijuana Licensing
Ordinance No, 1058–An Ordinance Providing Zoning Districts For Retail Marijuana Stores Retail Marijuana Cultivation Facilities Retail Marijuana Products Manufacturing And Retail Marijuana Testing Facilities
Unlike the recreational marijuana market, which has been around for less than a decade, medical marijuana has been legal since 2000. Despite being older, operating a medical marijuana dispensary is still a vibrant business opportunity. Getting started requires a Medical Marijuana Store license as well as a license from a local licensing authority. First, you need to complete the MED Regulated Marijuana Business License Application.
To get started in the cannabis industry, a business is going to need a substantial amount of capital. To apply for the Regulated Marijuana Business License, for example, a business will already need to possess the property where the business will be located, which could be a costly endeavor. In addition, it will also need to pay several fees to state and local governments, among them are:
Like all businesses, a cannabis-focused enterprise needs to first pick and name and incorporate with the Colorado Secretary of State. Cannabis companies can use any form of entity incorporate available in Colorado including corporations, limited liability companies, or limited liability partnerships. The choice of entity type could have significant legal and tax implications so we recommend speaking with one of Newburn Law’s experienced business lawyers prior to taking this step.
How to Start a Cannabis Extraction Business
On November 6, 2012, Colorado voters passed Amendment 64, legalizing the use and regulation of recreational marijuana. Two years later, Colorado started issuing licenses, and since then, the marijuana business in Colorado has boomed. Sales have increased every year since the market opened in 2014, and they show no signs of stopping. Even the economic slowdown COVID-19 pandemic caused could not slow the industry down. In fact, marijuana sales in 2020 increased 25% to $2.19 billion when compared to 2019. If you’re looking to get involved in this lucrative industry, we have some helpful information for you below; keep reading to learn more!
The fee for a medical license is $2,500. The fee for a recreational license is $6,500.
How to Open a Recreational Cannabis Dispensary
While possession and cultivation of marijuana are legal at the state level in Colorado, counties, and localities are given substantial discretion on how to implement marijuana legislation. Each town and county can decide to ban recreational marijuana businesses if they so choose. As of April 2017, 272 of Colorado’s municipalities had decided to prohibit the sale of recreational marijuana within their jurisdiction.
Dispensaries are divided into two types, a retail or recreational dispensary, where customers at least assuming they at least 21 years old, and having a valid form of government ID like a driver’s license or a passport, can purchase marijuana and a medical dispensary, where customers require medical marijuana card to make purchases. While medical cards can technically be acquired by individuals over 18 but below 21, it is important to note that businesses selling both medical and recreational marijuana at a single location cannot sell to anyone younger than 21 at that location.