January 1st was a historic day in the world of marijuana, and it sounds like it was a very profitable day as well. According to media reports out of Colorado, on the first day that marijuana sales became legal, retail outlets made over 1 million dollars. The media reports are making it sound like it was 1 million dollars made (net), not sold (gross). However, they weren’t specific, so take that information for what it is.
Regardless of whether it was gross sales or net profit, the fact of the matter is that a lot of marijuana was sold yesterday. On opening day, there were 24 shops operating, mostly in Denver. The State of Colorado has issued 136 licenses for retail marijuana stores total, so more and more stores will open soon. Will that result in more sales, or just spread out current sales to more locations – only time will tell.
Prices for marijuana surged the last couple of days as supplies dwindled. I think that more stores coming online should hopefully result in less sticker shock for customers, but it’s hard to say. 136 stores statewide is really not that many when you really think about it, and there are multiple factors that will come into play.
Yes, there will be more competition when all the retail stores open. But will there be so much more competition that it balances out with demand? A lot of people traveled to Colorado to purchase marijuana the last two days, but there will be many, many more people traveling there in the future. Also, everyone that bought marijuana the last couple of days are no doubt smoking all of it, so repeat customers will be flooding stores here soon. Long lines could become the norm in Colorado even after the rest of the stores open.
I’m curious five years from now how many stores there will be in Colorado. I’m also curious how other states legalizing will affect business in Colorado. I know when Oregon legalizes, no one will be traveling out of state for marijuana, if they even do so now. States in the South and Midwest will have to wait longer for legalization, so they will still travel for marijuana, and since Colorado is going to be the closest state for awhile with legal marijuana, I’d imagine it will be the number one destination for legal marijuana even after other Western states legalize.
Hopefully my friends in Washington won’t have to wait too much longer before stores open up there. I’d imagine even though Washington will be second to roll out stores, the outpouring of cash from customers will be similar. Especially considering the fact that citizens in Colorado can grow their own instead of going into stores. Washington customers don’t have that same option.