Effort to limit THC concentration in Colorado Adult Use dispensary products would devastate the state’s dynamic industry; concentrates and edibles companies, representing fastest-growing segment, would evaporate.
BOULDER, Colo., June 9, 2016 /Weed Wire/ — A proposed initiative to install a new cannabis-related measure into the Colorado Constitution would effectively end Colorado’s successful first-in-the-nation effort to permit the sale of recreational cannabis to adults.
The initiative would impose limits on cannabis product format and would restrict all cannabis products to a maximum 16 percent THC content. Drawing from its database of more than 10,000 products in Colorado and its wealth of data analysis professionals, BDS Analytics concludes that products on the market today that generate more than 80 percent of cannabis revenue would be banned. In addition, almost every edible product (which account for 11.5 percent of sales) would have to be repackaged.
“When we first encountered the proposed language we quickly understood it would have a dramatic effect on the market, and so we immediately began a meticulous analysis of how it might change the landscape for commercial cannabis,” said BDS Analytics CEO Roy Bingham. “Unfortunately, our instincts were correct. Should the initiative become a part of the Colorado Constitution, it would hobble Colorado’s fastest-growing industry.”
According to BDS Analytics, sales in Colorado Adult Use stores in the first quarter of 2016 were $170.3 million. Those sales fall into four key categories:
• Flower and pre-rolled products ($110.9 million and 65.2 percent)
• Concentrates and Extracts ($32.6 million and 19.2 percent)
• Edibles ($19.6 million and 11.5 percent)
• Others, including topicals and accessories ($7.1 million and 4.1 percent)
For the flower category, due to proposed THC restrictions, just 3 percent of cannabis on the market today would satisfy the proposed rules.
Alarmingly, none of the products sold within the fastest-growing concentrates and extracts categories will meet the criteria. In addition, less than 5 percent of all edibles products are currently packaged in accordance with the proposal. Among other things, the effective elimination of the concentrates, extracts and edibles categories will remove legal cannabis use from the lives of people who choose not to, or cannot, smoke cannabis.
Furthermore, some language in the proposed ballot initiative is either not definitive or it is unclear and could, in fact, mean that 100 percent of the products sold in the Adult Use channel would be banned.
The proposed measure would affect more than consumers. As of December 2015, Colorado had issued 26,929 occupational licenses to employees at cannabis companies, which represents a 68 percent increase over December 2014, according to a Marijuana Business Daily review of Colorado Department of Revenue data. This number represents only licensed people who work in cannabis facilities; the booming cannabis industry has hatched thousands upon thousands of jobs in ancillary businesses, such as companies that design lighting systems, build compliance software platforms and offer Colorado cannabis tours.