Jessica Rabe of Convergex Shares Colorado Cannabis Industry Outlook

Jessica Rabe - Research Associate at ConvergexSummary: Prices for recreational marijuana have mostly stabilized since our last quarterly survey of retail cannabis dispensaries in Colorado.

In June, we noted that retail prices had dropped from $50-$70 to $30-$45 for an eighth of an ounce, and $300-$400/ounce to the lower end of about $300/oz. In our most recent quarterly survey, conducted last week, sources reported no change to those June 2015 price levels. All contacts did cite “greater competition” as responsible for the pricing pressure this year as more retail marijuana dispensaries and grow facilities open.

Even still, based on our own estimates of the latest available tax data from the Colorado Department of Revenue, we expect stores to gross upwards of $500 million this year collectively, a +60% comp to 2014. So where is the profit going? Mostly safes and containers in the form of cash, as most banks won’t serve marijuana related businesses because the drug is still illegal on the Federal level. As such, the CO marijuana business is a unique case study in how businesses adapt when traditional banking services are unavailable.

Please read on for the details of our conversations with the owners/managers/employees of numerous retail dispensaries and our own industry analysis.

Read Jessica Rabe’s “Marijuana Store Survey and Industry Outlook Q3 2015”:

Published by NCV Newswire
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