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Colorado's cannabis industry had a hard year. Sales boomed during the pandemic to more than $2 billion statewide, but a post-pandemic decline has seen prices drop by more than 20%. Ben Markus of Colorado Public Radio reports on how some growers are coping.
BEN MARKUS, BYLINE: Just off the freeway in north Denver, among shabby-looking warehouses, the slight smell of marijuana on the streets signals that this is the city's de facto marijuana farmland. It's freezing and dry outside. But inside one of these warehouses, it feels tropical - warm and bright and humid, filled with tall green plants. This operation is owned by Matt Huron of Good Chemistry Nurseries.
MATT HURON: You're looking at my 401(k) right now (laughter).
MARKUS: It is not cheap to build one of these. But much to his chagrin, Huron is now competing with a bunch of new grows. It all started when the pandemic lockdowns led to a boom in demand. For the first time, legal cannabis sales hit $2 billion in Colorado in 2020. Investment rushed into every level of the industry but especially grows.
HURON: Everyone saw the lines around the corner. Cannabis is pandemic-proof, right? Well, you know, it takes - you know, it takes a good year and a half to build one of these things.
MARKUS: But by the time they opened, vaccines had become widespread. Pot lost some of its appeal, as people weren't just sitting at home streaming Netflix anymore. Huron and the other Denver growers saw what was happening, and they pulled back production. But at the same time, counties all over Colorado had already approved new grows, like out in rural Crowley County, where Roy Elliott is a county commissioner.
ROY ELLIOTT: It's still a pretty sore subject in the county.
MARKUS: Colorado lets governments ban marijuana businesses, and like most rural counties, Crowley initially didn't allow grow houses.
ELLIOTT: Being mostly right-leaning county, a lot of people aren't too fond of marijuana grows.
MARKUS: But it's only got 6,000 residents, half of whom are inmates at the local private prison. In 2016, Crowley OK'd pot farms. But nothing materialized until the pandemic, and almost overnight, it became the eighth-largest-producing county in Colorado.
ELLIOTT: It hit that boom after COVID, and I think too many people got into it.
MARKUS: Now Elliott says some of those grows are closing permanently, and many are still sitting on a lot of marijuana that hasn't hit the market yet, which means the supply glut will last into 2023. Christopher Stefan is a real estate broker who specializes in cannabis. He says that's bad because consumer demand never bounced back.
CHRISTOPHER STEFAN: You know, Black Friday used to be a big day for us, and it hit with a thud.
MARKUS: Marijuana tax collections have fallen by more than $90 million this year. It funds everything from school construction to addiction treatment. Stefan says during the pandemic, businesses were expanding rapidly, courted by big money investors. Now they're unraveling.
STEFAN: And now you're meeting with lawyers all day, and you're fighting your partners and your best friend.
MARKUS: Back in Denver at Matt Huron's grow warehouse, he says marijuana has become like the hypercompetitive restaurant industry, where some will do well...
HURON: And then there's, like, a gazillion other guys that open up a restaurant, and they're out of business in a year. And that's really what the cannabis industry is now.
MARKUS: And just like a restaurant, Huron hopes to distinguish his Good Chemistry stores by focusing on quality, on proprietary marijuana he spent years cultivating, appealing to the discerning customer.
For NPR News, I'm Ben Markus in Denver. Transcript provided by NPR, Copyright NPR.