Colorado’s wholesale cannabis flower prices increasing due to soaring demand and lack of growers

Bethan Rose Jenkins, Cannabis News Writer/Editorial

When wholesale cannabis flower sales in Colorado first took off, prices were steady and admirable. However, as production kicked into high gear, a surplus of flower suffused the market; triggering a drop in prices. Fortunately, things are looking up, with recent reports showing that Colorado’s wholesale cannabis flower prices have stabilized. 

Price stabilization has been attributed to increased demand from consumers. Additionally, the number of cultivators operating throughout the state of Colorado has reduced, meaning that there is less competition to contend with; numerous growers have taken a step back following the pricing predicaments that lingered a few months back.

Cultivators currently operating in Colorado’s cannabis market have quoted the following wholesale cannabis flower prices:

  • Greenhouse – $800-$900 (representing no change from last year)
  • Outdoor – $600-$700 (an increase from the $450 recorded last year)
  • Indoor – $1,200-$1,400 (an increase from the $1,000 recorded last year)

“It’s looking like it finally stabilized,” said the chief cultivation officer for Denver-based vertically-integrated cannabis company Medicine Man Technologies, Joshua Haupt. He anticipates that the market will soar to approximately $1,500-$1,600 per pound by the time the 4/20 (April 20) cannabis celebrations commence.

Colorado’s wholesale cannabis flower prices are recovering after sinking 

During late 2017 and 2018, Haupt says that the price of wholesale cannabis flower in Colorado took a nosedive; prices sunk to as low as $600 per pound. It was at this point that he said the “market fell apart”. Feeling pressured to turnover enough money to maintain their cultivation operations, many growers and operators closed for business. 

“The bottom fell out,” claims Haupt, who believes that as many as 500 cannabis cultivators in Colorado stopped in their tracks and didn’t resume business amid pricing predicaments. Although unfortunate for those who had to quit their industry involvement, the departure of hundreds of cultivators granted larger operators a window of opportunity; per-pound prices started inflating to $1,100-$1,200 soon afterwards. By late September 2019, wholesale flower prices soared to $2,000 per pound. 

Haupt says that fluctuations in Colorado’s wholesale cannabis flower prices are to be expected; when demand is high, the supply runs low and prices are hiked up. Summer attracts plenty of travelers who consume a lot of outdoor-grown flower. During the early winter, prices tumble to their lowest of the year, before skyrocketing when the 4/20 celebrations commence in April.

Outside investment driving up Colorado’s wholesale cannabis flower prices

Industry analysts have attributed the recent stability in Colorado’s wholesale cannabis flower prices to a surge of outside investment that occurred at the beginning of 2020. Market players received a cash injection from more well-established cannabis companies; of which invested in everything from growers, producers and manufacturers to small-scale retailers. 

Funding from outside industry giants led to a stabilization of supplies; the result of simplified transactions between growers and dispensary owners. Investments led to market variation and, in turn, increased demand from consumers. The lower cost of vertical integration allows businesses to serve their consumers for less, due to the firm not being subject to losing control of their supply, nor being uninformed about unexpected price inflation.

The progressively efficient market is benefiting businesses in running their operations without any hiccups. In addition to this, the consumer demographic is evolving. With a perfect climate year-round, tourists descend upon the state throughout both summer and winter. The snow-capped mountains create an idyllic setting for skiing, while the sun-drenched beaches entice surfers and sunbathers. 

“As long as we get sun in the summertime and snow in the wintertime, that’ll be there,” Haupt said. “Because our mountains aren’t moving.”