Smaller Denver Cannabis Growers Closing, Freeing Up Warehouses

Changing tides in the marijuana industry have reduced the need for grow operations at the same time that prices for cannabis are on the decline in Colorado.

Not all spaces are in the same position. Larger buildings are able to leverage scale to keep their profits up, but smaller buildings don’t have the same capability, setting up a shift for a portion of the industrial properties into which cultivators expanded so rapidly more than a decade ago.

“So these smaller spaces, like 5K SF to 10K SF, it's really hard to make money there,” said John Wickens, founder of Six Chair Blue, a cannabis-specific commercial real estate brokerage. “We're going to have a Broncos stadium coming in, they're building a women's soccer stadium, and every time I turn around, they're redoing Cherry Creek. So those spots are probably going to go to contractors.”

After the 2014 legalization of recreational marijuana sales, growers became a new tenant type for industrial landlords. Taking mostly smaller and older spaces, marijuana tenants grew to occupy 3.7M SF of industrial space by mid-2015, CBRE found at the time. Today’s market shifts could free some of that space back up for other uses.

Marijuana prices in Colorado reached $608 per pound, their lowest level since legal recreational sales began in 2015, as the market matures and companies are able to produce more.

Total sales in 2025 reached $1.3B, down 40% from the 2021 peak of $2.2B. More recent data isn’t available, as brokerages don’t regularly track cannabis-occupied spaces.

Declining revenue has coincided with a drop in the number of licenses for cultivation facilities and product manufacturers. The Colorado Marijuana Enforcement Division’s dashboard shows that last year ended with 487 active recreational cultivation licenses. Around 800 recreational cultivation licenses were active in 2022. 

Retail licenses have fluctuated much less. In December, the state dashboard showed 888 active licenses, including medical and recreational. Active retail licenses peaked in 2021 and 2022 at around 950.

Demand for cultivation facilities has all but disappeared as dispensaries have consolidated and can forgo growing their own product, Wickens said.

“The only time I ever sell a grow is if it's part of a dispensary deal,” Wickens said. 

In February, representatives for the Denver Broncos purchased a 90K SF former grow facility in Burnham Yards, near the planned new stadium, for $12.8M, the Denver Business Journal reported. The facility had previously been owned by the cannabis chain Green Dragon, which is being acquired by Minneapolis-based Vireo Health LLC.

In March, Vireo closed a north Denver grow owned by PharmaCann Inc., which it acquired last year, according to the Denver Business Journal. The closure of the facility at 5131 Franklin St. will cut 132 jobs. 

Denver’s industrial market, like most across the country, is slowly evening out after a burst of new construction immediately following pandemic lockdowns. The market’s vacancy rate declined slightly to 7.5% to end 2025, and positive net absorption reached 3.6M SF for the year, well above 2024’s 900K SF.

Remaining marijuana purveyors could take advantage of the opening in the market, as demand for cannabis products remains high.

The closure of these cultivation facilities means “a significant supply source for cannabis that’s all being taken offline,” said Ryan Hunter, CEO of cannabis manufacturer Spherex. The company has a 20K SF industrial space for manufacturing, but it could add its own grow space.

“With the challenges we’re seeing with the lack of supply, it has given us motivation to consider whether or not we want to do our own cultivation, so we’re exploring some opportunities to do that,” Hunter said.

Prices will also be influenced by increasing manufacturing costs, which stem in part from tariffs on e-cigarette parts used in cannabis vapes, Hunter said. Spherex had to increase prices on one of its most popular cartridges in response. 

“When those prices go up, that encourages growers to cultivate more, so we think that over the next couple of years, we’ll see that start to correct,” Hunter said.

The slew of cultivation facility closures was likely needed to help even out supply and demand, Wickens said, but he added the market is “past the bottom” and on the upswing.

“Values are going to go back up, and Colorado’s going to be in good shape,” Wickens said.