As cannabis prices plummet, Colorado cannabis growers are looking to halt new licenses

Through Nina Zdinjak

As marijuana prices fall in some states, cannabis companies are blaming oversupply and calling for a halt to licensing.

Medical marijuana (MMJ) sales in Colorado have declined significantly. So far this year, total sales have exceeded $1 billion, but MMJ July sales hit just over $18 million, “the lowest monthly number on record since January 2014,” as Retail sales were legalized in Colorado.

In addition to the drop in sales, wholesale prices appear to be falling to record lows, prompting a group of Colorado growers to call on the state to stop issuing cultivation licenses, reports Westword.

The price per pound of all commercial cannabis hit a record low in September, according to data from the Colorado Department of Revenue. Colorado’s coalition of thirty cannabis growers and dispensary owner groups says oversupply is the main culprit.

“For the first time since legalization was introduced, marijuana sales and marijuana tax receipts will be significantly lower than in the previous calendar year,” the coalition wrote in a Sept. 15 memo. “The problem is further compounded by the country’s overall economic situation, with record high inflation driving down sales of consumer goods. Despite a drop in demand, supply of marijuana continues to increase, with new licenses being issued and additional cultivation capacity approved for current licensees.”

Photo by traffic_analyzer/Getty Images

Similar scenario in Michigan

The Great Lakes State appears to be facing the same problem. As a result, its largest cannabis operators recently launched an offensive to keep competitors from entering the market.

In response to demands from lobbyists for some of the state’s big growers, the Legislative Service Bureau drafted new legislation to bar the Michigan Regulatory Agency from issuing new cultivation licenses.

RELATED: Why Are Colorado Marijuana Sales Plunging?

The bill effectively calls for an indefinite moratorium on licenses.

The law is expected to be presented after the November elections.

Recreational cannabis prices in Michigan have fallen dramatically. In August, the average price of $1,869 per pound fell 3.9% sequentially and 47.5% year-on-year.

This article originally appeared on Benzinga and has been republished with permission.