Colorado Shifts From Medical to Adult Use as Legal Market Expands

• The number of licensed cannabis businesses has begun to plateau as the industry nears saturation, and operators attain efficiency and scale.
• Among licensed businesses, medical cultivation facilities saw the steepest decline while adult-use processors saw the highest rate of growth in the three–year period ending June 2019.
• In the same period, contraction in the medical market – for both licensed businesses and product sales – has been offset by continued strong growth in the adult-use market.
• Sales of medical concentrates surged even as flower demand contracted, reflecting patients’ strong interest in noncombustible products.
• After the EVALI (i.e., tainted vaping) crisis of last fall (coupled with industry-wide liquidity challenges in latter 2019), demand turned from concentrates (vapes in particular) toward flower and noncombustibles, driving further consolidation in business licensing.

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