Editor’s note: This story has been corrected to reflect that Michael Cox is the former general manager for Dalwhinnie Group, the landlord for Dalwhinnie Farms.

The cannabis industry’s downturn has reached Ouray County, leaving only one grow facility currently operating and a handful of retail businesses to ride it out, while local governments manage dwindling tax dollars.

Gone is the legalization-era wealth of cannabis cultivation and retail operations in Ouray County and across Colorado, and with it went the wealth of tax money for Ouray County and the town of Ridgway.

For years, those revenues grew despite fights over regulating grow operations in the county. But data shows local and state industry fortunes have peaked and dropped to levels seen around 2014 when licensed retail stores first started opening in Colorado. Voters legalized recreational marijuana use for those 21 and older in 2012.

Local sales taxes collected from dispensaries in Ridgway last year measured roughly half of what they amounted to in 2024, causing the town to prune its expected revenues from the industry for 2026.

And as of this year, there’s only one grow facility currently operating in Ouray County, after the closure of Dalwhinnie Farms and another cultivation facility leaves an estimated six-figure hole in the county’s budget.

Some local business owners and officials say the cannabis market slump is typical of any new industry, and the business will recalibrate. Others say Ouray County’s own struggles over regulating grow facilities and subsequent strict regulations may play a role. But all players agree the broader economic climate is impacting both the industry’s producers and consumers, and therefore governments that receive a slice of its profits through retail and excise taxes.

The boom

Ouray County and Ridgway didn’t hesitate to get in on the recreational green rush of 2014, as their governing boards approved rules opening the doors to those cannabis operations. That eventually ushered in a flush of revenue to their respective general funds, allowing for expanded services, such as hiring a Ridgway town planner.

Alternatively, the city of Ouray banned all types of medical or recreational marijuana operations within city limits.

Colorado’s legalization of recreational marijuana came with a 15% marijuana sales tax on retail sales, which local governments receive a share of. Ridgway also collects its own 3.6% sales tax.

The first recreational dispensary in Ouray County opened in 2014 in Ridgway. Since other retailers opened, the town has steadily raked in more than $100,000 in local sales taxes alone each year since 2015, totaling $2.88 million as of October 2025.

Ouray County overturned its ban on cannabis operations in 2014. In 2015, Ouray County voters also opted to cash in on the industry, approving a 5% excise tax on all marijuana cultivation facilities. The county received its first application for a cultivation license that year. However, the county has faced a much more complicated relationship with the cannabis industry than the town.

Ouray County commissioners have amended the county’s own rules governing marijuana operations eight times since 2014, adopting the latest and strictest set of rules in 2022. Oftentimes they did so in response to fierce pushback from neighbors of those facilities who complained about the smell and other nuisances. Some neighbors even formed an official group to fight existing and potential grow operations.

In 2020, the county denied an application for a dispensary in Colona, leading to a ban on cannabis retail stores in the unincorporated county as part of the 2022 marijuana ordinance. Commissioners also created and extended a ban on applications for new cultivation licenses, while the county bought time to create stricter rules. This prompted a lawsuit from a company that had applied to operate a grow facility near the old Bar C Ranch, on Citadel Drive. Ultimately that lawsuit was dropped.

Overall since 2014, the county has received 10 applications for cultivation licenses. The county approved eight of those licenses and denied two. The county also denied three license renewals, while two of the total approved licenses were never active. And more than a decade later, only one cultivation license hasn’t lapsed or relinquished and remains active: Mountain Annie’s.

Despite the push and pull, the cultivation industry still brought in a notable amount of excise tax money for the county over the years — $1.92 million since 2016.

The decline

Ouray County and Ridgway’s fortunes from the marijuana industry started to shift significantly last year, reflecting a broader industry downturn that began years earlier. A state marijuana data dashboard shows different outcomes for cultivation versus retail operations for both recreational and medical marijuana — cultivation licenses have drastically decreased while retail licenses have only dwindled.

According to a Colorado Department of Revenue dashboard that includes cannabis industry data starting in 2017, the number of licensed recreational and medical cultivation facilities in 2025 were less than half of what they were in 2017. At the end of that year the state recorded 1,479 licenses. That number had dropped to 814 facilities by the end of 2024, then to 724 facilities as of September 2025.

This is likely due to a huge downswing in the profit from wholesale marijuana flower. According to the Colorado Department of Revenue, the median market price for retail flower is currently $648 per pound. That’s less than 40% of the peak price of $1,721 per pound at the beginning of 2021.

Ouray County mirrors the decline in cultivation facilities over the last few years, with only one operation left standing. Excise tax revenues dwindled overall since peaking in 2020, with the county bringing in $328,856 that year. Last year the county brought in $208,112 in marijuana excise tax revenues.

It’s unclear how much the dip in the cost of wholesale flower contributed to those businesses closing. Most operations closed after the county adopted its newest regulations in 2022.

In 2023, commissioners declined to renew a license for MS Support’s grow facility on Log Hill Mesa after saying the operation failed to meet regulations and following numerous complaints from neighbors.

Cannaboo Farms relinquished its license in 2024, saying it couldn’t meet county standards.

During the second half of 2025, Ouray County received notice that its largest grow, Dalwhinnie Farms, and another, Shining Mountain, LLC, would be relinquishing their cultivation licenses. The 168-acre Dalwhinnie Farms property on County Road 23, which was listed for sale for $19.5 million in July, is under contract and was taken off the market Jan. 4.

It’s not clear whether the property will continue to be used for marijuana production. Justin Trouard, the CEO of Mammoth Farms — the self-proclaimed world’s largest cannabis cultivator as of 2024 — told the Plaindealer his company purchased the cannabis cultivation portion of Dalwhinnie Farms. This involved moving the facility’s equipment from Ridgway to Mammoth Farm facilities in Saguache County.

Michael Cox, former general manager of Dalwhinnie Group (the landlord for Dalwhinnie Farms), didn’t respond to a request for comment about the pending sale or future of the property by deadline.

Dalwhinnie’s closing leaves Mountain Annie’s as the last operating grow facility in the county, prompting county leaders to adjust the budget heading into this year. The county has budgeted a roughly $260,000 hole from reduced marijuana excise tax revenues in 2026.

According to the same Department of Revenue dashboard, the number of retail licenses for both medical and recreational marijuana has only slipped slightly since 2017, peaking in 2021. The number of retail licenses actually increased from 971 in 2024 to 986 in 2025.

Last year, Ridgway lost one of its four dispensaries and saw revenues from those remaining businesses drop significantly.

The town collected $129,481 in local sales taxes through October of 2025, compared to $227,938 through October 2024, prompting the town to prune its anticipated revenues for this year.

On top of that, local governments’ share of the state’s 15% tax on retail marijuana sales shrunk. Because the state was also collecting lower tax revenues, it lowered its contribution to local governments from 10% to 3.5% starting in July last year.

Pressure on cultivation operations

Clifton Knipe, owner of the Mountain Annie’s grow facility north of Ridgway and four dispensaries, including one in Ridgway, spoke to what he’s seeing happen to both cultivation and retail operations.

Knipe said the overall cannabis market downturn isn’t specific to Ouray County, but is rather simple economics of a new industry. Colorado was the first state to legalize recreational cannabis, temporarily making it the sole supplier of a big demand — both for growing and selling marijuana. As other states followed suit, the industry became more concentrated, prices dropped and not all businesses survived, he said.

Whitney Economics and the Vangst Jobs Report, which study the cannabis industry, authored a report saying the industry was recalibrating heading into 2025.

The industry saw jobs decline in 2024, according to their 2025 U.S. Cannabis Jobs Report. The memo also reported lower revenues from 2023 to 2024 in 19 out of 24 states where cannabis is legalized, including Colorado. The report also cited another survey conducted in 2024 that found 27.2% of operators were profitable and 40% were only breaking even.

Knipe is waiting out the slump, hopeful conditions will improve once the market corrects.

“Right now it’s survive the down trend, and then when all the other players wash out, it’s (time to) rebuild,” he said.

Knipe said cultivation can be especially challenging. He’s had to be strategic in order to keep his business open, given high operational costs and the volatile market for wholesale cannabis flower.

Sitting at a table at the back of the Mountain Annie’s dispensary, Knipe pointed to a TV relaying live footage of his employees tending to rows of marijuana plants.

The screen also displayed digital knobs and dials carefully monitoring and controlling humidity, temperature, wind speed of the greenhouse — expensive equipment that ensures proper grow conditions.

“Look, you spend that money and you set up a grow, and then the price of the flower falls, your cost doesn’t. So now you’re in trouble,” Knipe said.

He said he’s only been able to maintain the costly operation because he also owns dispensaries where he can sell his product. Mountain Annie’s has retail shops in Ridgway, Silverton, Durango and Cortez.

Mountain Annie’s dispensary in Ridgway is the only local pot shop that is still actively cultivating its own marijuana in Ouray County, after the closure of the largest grow operation – Dalwhinnie Farms, which is under contract for sale and sold its marijuana equipment to another cannabis farm in Saguache County. The county has budgeted a roughly $260,000 hole from reduced marijuana excise tax revenues in 2026. 
Erin McIntyre | Ouray County Plaindealer

Growing marijuana for his own stores — which sell about 30% of his own flower and 70% other products — helps insulate him from the unstable market.

He said other types of business models haven’t worked as well, such large grow facilities that sold only their homegrown product at their dispensaries.

“We discovered that variety is the name of the game when you’re selling flower,” Knipe said.

Knipe believes both state and county regulations have actually had a positive effect on the industry by attracting people and money willing to invest in what they see as a stable industry. He doesn’t see an issue with the county’s strict standards for nuisance mitigation.

“Without regulatory structure, you have chaos, and who wants to run a business in a chaotic environment?” he said.

Jameson Holt, sales manager of Ridgway’s first dispensary, Rocky Mountain Cannabis, said multiple factors can make it hard to run a grow operation in Ouray County.

He said one challenge is dealing with neighbors of grow operations. And other factors include cost and difficulty of bringing in adequate electricity to properties where grow facilities are allowed.

But he attributed the overall decline of grow operations in Ouray County to current market conditions.

County leaders echoed those thoughts. They also said the county’s regulations may be a deterrent, but economic barriers to the industry likely play a bigger role.

Commissioner Jake Niece voiced concern about regulating the industry out of existence in the county while crafting the 2022 marijuana ordinance, though he ultimately voted for the stricter rules. He said while those rules may be a deterrent, market conditions are likely the main reason the county has lost grow facilities.

“I don’t think that even if we just deleted our ordinance and threw the doors open and said there’s no regulation, I don’t think that that would bring in new investment based on just the prices that are out there, and the lack of profitability in the business right now,” Niece told the Plaindealer.

The county hasn’t received a new application for a cultivation license since 2023, according to Ouray County Senior Planner Bryan Sampson.

“The initial excitement period of people seeking to get into that industry has settled down. Our real estate here is expensive, combine all that with an arduous license ordinance program, it’s not conducive,” Sampson said.

Pressure on retail operations

Though Knipe has been able to hold onto Ouray County’s last grow facility, he’s seeing declining revenues across all the dispensaries he owns, like other retailers in Ridgway. Holt agreed, saying he didn’t see a decline in the number of sales last year, but rather a decline in the average price of individual sales.

Holt attributes this to the lower cost of certain marijuana products as the industry has become more concentrated. It’s also because people don’t currently have the cash for pricier products, he said. But he said Rocky Mountain Cannabis is more insulated considering it has 16 retail locations in Colorado And New Mexico.

Rocky Mountain Cannabis sales manager Jameson Holt holds a sample of John Truffolta cannabis flower from a container at the Ridgway shop on Jan. 27. He said while customers are continuing to visit the shop and purchase cannabis, many of them are choosing less-expensive products.
Erin McIntyre | Ouray County Plaindealer

He’s well aware of the current economic conditions for some of his customers, and said while his base has remained steady and is even seeing increased foot traffic, people are just purchasing cheaper options. He compared it to coffee – someone might not spend $10 on a latte but they’ll still pick up a can of Folgers. It’s not like they’re giving up coffee altogether, or weed.

“We’re losing the luxury aspect to a certain degree,” Holt said.

Lia Salvatierra is a journalist with Report for America, a service program that helps boost underserved areas with more reporting resources.