Amid continuing declines in the nation's first legal recreational cannabis market, another prominent marijuana player is leaving the 'Mile High' state.
Once considered the benchmark by which all other legal and regulated adult-use cannabis markets should be measured, Colorado's still-prized and treasured plant medicine sector is painfully mired in a steep economic downturn.
Following the massive financial bump created by the isolating and stress-producing COVID-19 pandemic lockdowns, the cannabis industry has been going through a bit of a Jekyll and Hyde existence. While the overall revenue numbers have steadily increased since Colorado and Washington became the first two states to legalize adult-use cannabis for adults over 21, more mature markets like Colorado's have experienced a substantial decline since the lockdowns ended.
For example, this past February, cannabis sales hit a four-year low of $128 million for Colorado dispensaries. Overproduction and a global economic recession are primarily to blame for the drop. However, some economists view the dip as an understandable adjustment as other neighboring states begin to legalize, reducing the amount of "cannabis tourism" the state enjoyed for over a decade.
While Colorado cannabis sales are on track to exceed $1.5 billion this year (State Department of Revenue Estimation), those numbers would be roughly 12%-15% less than the $1.77 billion collected by dispensaries in 2022. Moreover, the 2023 final numbers would be a whopping 40% down from the record $2.2 billion in 2021 marijuana sales.
As a result of that market adjustment, several formidable players, unable to sustain a competitive foothold in the shrinking Colorado cannabis industry, are leaving the former marijuana mecca.
One of the latest major brands to call it quits is Coda Signature, an early entrant in the state’s regulated cannabis sector. According to multiple local and national media outlets, the homegrown, award-winning edibles maker says it will now concentrate on gaining a foothold in other markets after dealing with numerous and escalating challenges in the highly competitive Colorado marketplace.
"Coda Signature has remained the number-one selling chocolate in Colorado for years. However, Colorado's cannabis market declines in recent years combined with the significant oversupply has caused the company to make the difficult decision to close operations in Colorado," the company said in a statement.
"Coda Signature has remained the number-one selling chocolate in Colorado for years. However, Colorado's cannabis market declines in recent years combined with the significant oversupply has caused the company to make the difficult decision to close operations in Colorado."
- Statement Release by Coda Signature
Coda isn’t the first prominent cannabis company to leave Colorado amid market declines, and it most certainly will not be the last. This past January, industry titan Curaleaf ceased all operations in the state, including a few retail product brands and Colorado’s most extensive outdoor cannabis cultivation.
What makes Coda's departure that much more painful is that it began in Colorado as a small boutique edibles/topicals maker with a passion for quality and the highest standards. As a result of that dedication, the brand won numerous "Westword: Best of Denver" awards over the years for its edibles and topicals and an additional 30 other cannabis cup and media awards.
In recognition of those achievements and the acknowledgment that none of it would have been possible without the aid and dollars from the welcoming and maverick Colorado cannabis industry, Coda co-founder Lauren Gockley said, "As I reflect on the remarkable journey of the past eight years in Colorado, I am filled with an overwhelming sense of gratitude and humility. Today, I want to extend my sincerest thanks to the entire Colorado cannabis industry, a community that has played an instrumental role in our growth and success."
"As I reflect on the remarkable journey of the past eight years in Colorado, I am filled with an overwhelming sense of gratitude and humility. Today, I want to extend my sincerest thanks to the entire Colorado cannabis industry, a community that has played an instrumental role in our growth and success."
- Coda Co-Founder Lauren Gockley
While it is a sad day for Coda and its many fans, it is crucial to remember that the legal adult-use cannabis market sector is barely a decade old. With marijuana still illegal at the federal level and in 26 states, developing a consistent and sustainable growth plan is a significant challenge for many multi-state operators.
As more and more states come online and more capital and stability enter the market, moves like the ones by Coda and Curaleaf will hopefully become less frequent and painful. Until that day comes, consumers should enjoy how far cannabis has come in less than ten years. In addition, they should also embrace the seismic changes ahead for one of the world's most popular, polarizing, and unique industries.
