As a pioneer in the industry and one of the most mature markets in the US, the Colorado adult-use market is an important one to watch and holds a significant place in the growth and development of the cannabis industry. Below, we look at the past year of adult-use cannabis sales and see how trends in category share and pricing have changed over time. The below data was sourced directly from Headset Insights from January 2021 to February 2022. Data for Colorado cannabis sales include only adult-use sales.
Let’s first gather a high-level understanding of what cannabis sales trends look like within the adult-use market of Colorado. In this graph, the purple bars represent the cumulative sales through January 2021 to February 2022, and the orange line represents the total monthly sales for each month.
We can see that this market has shown a relatively stable rebound in sales from the market fluctuations resulting from the COVID pandemic. Starting in January 2021, total sales added up to nearly $152 million. Sales dipped slightly in February, which isn’t very surprising considering February is a shorter month. In July 2021, Colorado cannabis sales reached a peak of just under $168 million. The remainder of the year showed a slow, yet consistent decline in month over month sales, with just under $124 million in total cannabis sales in February 2022.
Colorado’s adult-use cannabis market has remained healthy through its nearly decade-long lifespan. In 2021, the collective cannabis consumers in Colorado (say that five times fast) spent a total of $1.8 billion on their favorite brands, strains, and cannabis products. Despite the strength in this market, looking at the difference in combined sales, we see a 14% drop in year over year sales for January 2022.
Now that we have an understanding of the size of the adult-use market in Colorado, let’s dive a bit deeper to explore which categories are making up these sales. Flower has proven to still be supreme in this market, despite so many advancements in product innovation and brand equity, although trends have been changing through time. Making up roughly 42% of all sales from January 2021 to February 2022, Flower is performing quite well overall. In this next graph, we see how this has been changing over time.
Here we see that in January 2021, Flower category sales commanded 46.9% of all adult-use cannabis sales. However by February 2022, Flower share dropped to 35.5% of the overall market. In the same time period, Vapor Pens have increased their share by nearly 6% and Edibles have increased their share by almost 4%. It will be interesting to see how these trends continue to change in Colorado.
Now let’s look at how average item prices (AIP) have changed across all categories. As the market matures, we see factors that influence price competitiveness within more established categories. Through optimizations in the supply chain and cost reductions across cannabis products, we see increasing pressure to compete for the best price point. For example, the Flower category was leading in AIP in January 2021 at $30.84. By February 2022 however, we see AIP of Flower products drop roughly 20%, ending at $24.58 per item.
In the same time period, Capsules (-12.7%), Concentrates (-6.2%), Tinctures & Sublinguals (-6%), and Beverages (-5.7%), also experienced compression in AIP. Not all categories experienced price compression however. Edibles (+2.9%), Vapor Pens (+3.6%), and Pre-Roll (+4.8%) categories experienced increases in pricing in this time period. The AIP for all Topical products actually increased by 14.2%!
As the Colorado market continues to expand with new products and brands, we will continue to examine and monitor changes in categories, pricing, and more. To explore the opportunities in Colorado and other legal cannabis markets, sign up for a demo.