It was mistake to see anything happening during the pandemic as the new normal. It’s the reason why the stocks for Zoom and Peloton have sunk in the past year, and it’s the same reason why we’re seeing a much less enthusiastic marijuana market.
When people were literally stuck home, the idea of spending lots of money on marijuana seemed like one of the only options out there. Naturally, there was a steep rise in weed products being sold, both legal and illegal. In those legal states, we have the numbers to back up these claims. Sales were up 25.8% in Colorado between March 2020 and 2021.
Then, people were becoming social again, and that rising number began to stabilize. People are now spending $4 less on average in a retail store than they did one year ago.
However, the entire industry is still nascent and expanding in a slow rollout necessitated by the legalization of state by state, so it’s still growing. Combined sales this year may reach $33 billion, up from $27 billion of last year. We’re just seeing less enthusiastic purchases in the already open markets.
The pandemic also isn’t the only reason for the decline in product sales. Inflation hits marijuana hard, with already sky high state taxes, which then leads more and more people to build out the illegal market.
Investments have been down as well. Capital is down 62.6% from one year ago, and equity financing down even more, hitting $2.1 billion last year and only reaching $78 million so far this year.
It seems we’re in the middle of a correction from unreasonable highs due to an abnormal environment for marijuana. While it doesn’t spell long term trouble for the plant’s capitalistic future, it does mean the excitement felt in the industry just last year may be dulled for the time being.
Read the original article at CNBC.