Breckenridge pot sales dip after 25-month run of gains

Eli Pace
Summit Daily
A marijuana bud
Hugh Carey/Summit Daily

Getting high is down in Breckenridge for the first time in more than two years — or at least that’s what the town’s sales tax receipts from its marijuana dispensaries seem to indicate.

According to the latest financial report prepared by town officials, Breckenridge pot sales fell 1.73 percent in September, the most recent month for which figures are available, compared to September 2016, putting an end to the town’s 25-month run of rising marijuana sales. Overall, Breckenridge still remains 5.3 percent ahead year-to-date in estimated sales tax receipts.

However, September’s decline marked the first time since July 2015 that the town’s “weedtail” category — as officials have creatively coined it — hasn’t produced better numbers than it did the same month in the previous year.

Breckenridge finance director Brian Waldes said he’s discovered tracking marijuana sales reports in Breckenridge can be “wacky,” with the sector known for wild, high-percentage spikes within a relatively short sample period.

Before September’s decline, Breckenridge pot sales had increased every month throughout the last half of 2015, all of 2016 and the first eight months of 2017.

Before September’s decline, Breckenridge pot sales had increased every month throughout the last half of 2015, all of 2016 and the first eight months of 2017. That gave Breckenridge marijuana sales a 25-month run of consecutive month-over-month increases, which interestingly enough, immediately followed five months where pot sales actually declined in 2015.

Waldes said that, at the time, he thought the new burgeoning market might have found its ceiling, that “the thrill was gone, the novelty had worn off.”

“It all seemed to make sense anecdotally,” he said of the five-month dip, but then the marijuana sector turned around and went “through the roof again” throughout the rest of 2015. That trend continued in 2016 and throughout much of this year.

For Waldes, tracking Breckenridge pot sales can be interesting, just like it is for many other people who want to know what’s happening with the market that’s existed only since 2014.

A dollar spent on marijuana yields the highest revenue per dollar for the town because of what’s collected through state and local taxes, Waldes said, but he knows pot sales remain a tiny fraction of overall collections and it’s more of an “interesting” sector than an impactful one.

Still, some local dispensaries are attributing September’s decline, at least in part, to falling retail prices, which wouldn’t necessarily mean the number of sales were down, but that they’re collecting reduced revenue because they’re charging less for their products.

A recent industry report from Cannabis Benchmarks seems to fit that line of thinking, with the market-research company recently unveiling a study showing Colorado has the lowest wholesale pot prices in the country, with some of those savings being passed on to consumers.

At the same time, an employee at the Green Dragon dispensary in Breckenridge was so busy helping other customers Friday afternoon she barely had time to talk.

Over the phone, the woman said that, looking at the Green Dragon’s margins, “prices have gone down a ton,” and she believes that might be one big reason overall sales slipped a little in September.

Typically, Breckenridge pot sales fluctuate between about $500,000 and $1 million in any given month, and last March stands out as the high-water mark with a record $1.3 million in marijuana sales.

So far, only eight other times in history has the town seen its marijuana sales eclipse the $1 million mark during any single month. What’s more is four of those eight $1 million-plus months — December 2016 through February 2017— came directly leading up to this year’s record-setting March.

Of course, the run of ever-rising sales tax receipts month after month in Breckenridge had to end at some point. Earlier this summer Frisco saw its marijuana sales decline in two consecutive months for the first time in history — and only one other month on record not posting a gain — but nobody at any of the dispensaries the newspaper talked to for this article seemed to think there was any reason to worry.

Silverthorne only has one pot shop, High Country Healing, but because the town won’t release financial information for individual businesses, Silverthorne’s pot sales are hidden inside the town’s consumer retail category.

Silverthorne revenue administrator Kathy Marshall pointed out there’s been massive gains in that category, which is up more than 6 percent year-to-date, but she said she can’t “really comment on how our one marijuana store is doing.”

The store’s general manager, Joe Pepe, could however, and he said that an uptick in competition — compared to when they were the only pot shop in the area — “derives a lower price point throughout” the marijuana industry in Summit County.

“Likewise, we’ve been running — in terms of our numbers — pretty average with what we’ve been at in past years,” Pepe said, explaining that High Country Healing is aided by being one of the few all-organic dispensaries that grows all of its cannabis in-house, and business remains good.

“Absolutely, we’re rocking,” he continued. “We’re all constantly cranking out new things, trying to do new stuff and give people that well-rounded, personalized experience they are looking for.”