A chain of seven Denver marijuana retail stores plans to close all its dispensaries because of a sharp decline in sales volume.
Buddy Boy Brands suffered a loss in revenue under a new state law that drastically reduced purchase limits for medical marijuana sales, which totaled about 90% of the retailer’s revenue, according to the Denver alt-weekly Westword.
Changes to regulations reduced the amount of MMJ concentrate that patients could buy from 40 grams to 8 grams.
The company, founded in 2014, operated seven dispensaries in the city.
Buddy Boy owner John Fritzel also owns Lightshade, a chain of 11 stores as well as a cultivation arm. He told Westword he plans to keep those open.
Medical marijuana sales in Colorado are down by 43% in the first four months of 2022 compared to the same span in 2021, Westword noted.
According to the state’s Department of Revenue, wholesale prices and overall sales volume have gone down and overall sales volume has declined for the 11th month in a row.
According to the Colorado Marijuana Enforcement Division, the price of wholesale marijuana flower is down by 46% since January 2021.
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Although new laws in Colorado might have played a role in Fritzel’s decision to shutter Buddy Boy, cannabis business owners across the country are experiencing economic turmoil.
Oversaturation of emerging markets, among other factors, has led to retail owners increasingly discounting their products to remain competitive.