Colorado’s wholesale marijuana market remained active this May as new listing volume reached its third highest level on record. This continued burst of increased wholesale activity has brought about pivotal shifts in the market, keeping buyers and sellers on their toes as we head into summer.

Rec Surge Presses On

With asking prices for recreational flower facing strong downward pressure for much of the year, many sellers hoped for tighter inventories and much needed price stability following the anticipated boost in 4/20 sales; unfortunately for many, recreational flower volume continued to dominate the market this month, making up nearly half of new listings on the Cannabase Marketplace.

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Recreational flower volume more than doubled from April, triggering a significant drop in average asking prices. The added volume this month sent prices tumbling by 13% to an all-time low of $1,550. Although sellers have already endured an 18% price drop from this time last year, milder weather is expected to continue to fuel increased competition as output from greenhouse and outdoor suppliers ramps up in the coming months.

This build up in recreational inventory was not limited to flower. Listing for rec trim and shake surged this month, adding 745 lbs to the market . This can be largely attributed to higher demand for trim from processors, who appear to be tolerating prices above $500 for the time being.

New Med Paradigm Takes Root

In stark contrast to the crowded rec market, a short supply of medical product continues to keep prices elevated. Despite falling 2% over the last month, average asking prices for medical flower continued to trend higher than those for recreational for the third straight month.

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Historically, medical flower prices tend to trail rec by 8% on average, and though we’ve observed exceptions to this rule before, the current sustained price disparity is certainly notable. Though average asking prices experienced a sharp increase last March, they have remained relatively stable since then - an indicator of a strong supply/demand pattern that is likely to persist. As this shift continues to prove more significant than a short-term anomaly, buyers can expect to face steeper than average prices in coming weeks.

The market for medical extracts also remained tight, with listings volume for new product falling well-below normal this month. This increased scarcity gave sellers a modest break from the downward price trend we’ve observed over the last several months. The average asking price for a gram of medical extract rose 7.4% ($1.33) to $19.33.

Market Prospects

Typically, Colorado’s wholesale environment has been characterized by prices that waver in favor either buyers or sellers; The activity we’ve observed on the Cannabase Marketplace over the last few weeks however, point to an emerging rift between medical and recreational market dynamics. As this trend persists, it becomes increasingly likely that the long established pricing relationship between medical and recreational flower is a thing of the past.

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