Marijuana Prices Are Plunging in Colorado, and That Could Be Bad News

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News flash: marijuana prices are plummeting in Colorado

At seemingly every turn, cannabis companies face challenges. Well, it’s time to add yet another.

According to a new analysis from The Economist, the wholesale price for a pound of cannabis in Colorado, the first state to begin legally selling recreational pot, has plunged from a peak of $2,000 in January 2015 to just $1,300 a pound today. Lower prices for dried cannabis are likely to mean lower margins, unless the cost per gram to produce marijuana has fallen by more than 35% over that same period.

Why the 35% drop in wholesale marijuana prices on a per-pound basis? The Economist attributes an expansion of supply and an increase in competition as

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