Colorado is losing businesses and jobs at an alarming rate. The Colorado Chamber of Commerce has been sounding an alarm for years about excessive regulation and last year more people moved out of Colorado than into the state. Not only are people leaving but companies are running for the exits; since 2019, 98 companies have either left the state, expanded elsewhere, or scrapped plans to move here. Why the huge change in Colorado’s fortunes? How did Denver and Colorado go from a zoom town to doom town? Is the drop in competitiveness a blip or a trend? How does this impact real estate prices (check out the chart below).
What was in the Colorado Chamber’s report on Colorado’s business climate?
Since 2022, Colorado has also had a net loss of 34 public company headquarters. Some of the states seeing gains from Colorado’s losses included Texas, California and North Carolina.
More than 200 business and civic leaders signed a letter to Gov. Jared Polis, Sen. John Hickenlooper, Denver Mayor Mike Johnston, and Democratic gubernatorial candidates Michael Bennet and Phil Weiser. It warns of dire consequences if Colorado doesn’t become a more welcoming place for job creators.
“We are going to be hurting Coloradans not just now, but the next generation, the next generation after that. And we just want to course correct,” said tech entrepreneur and investor Dan Caruso.
Caruso led the letter that calls for a “bipartisan 20-year strategy” aimed at making Colorado the “premier technology and innovation ecosystem.”
“Certain states are winning and other states are losing. And let’s make no mistake about it, we’re in the losing camp right now,” Caruso said.
Excessive regulation is the primary driver of the Colorado business exodus
A study commissioned by the Colorado chamber found that Colorado is the sixth most regulated state. Increased regulations add costs and uncertainty for businesses. These regulations include
2024 “Algorithmic Discrimination” Law: This law, which holds employers liable for discrimination resulting from the use of Artificial Intelligence (AI) tools, has been labeled one of the most concerning policies for businesses, with some linking it to companies leaving the state.
Environmental Regulations (GEMM Rules): The Environmental Justice Act (House Bill 1266) and subsequent Greenhouse Gas Emissions Management (GEMM) rules are criticized for creating heavy compliance burdens, particularly on the industrial and energy sectors, despite concerns about their effectiveness.
Labor and Leave Regulations: The complexity of new state regulations regarding paid employee leave and rising labor costs are major concerns for business owners, particularly for small businesses that lack large human resources departments.
Uncertainty in Energy Regulation: Frequent shifts in energy regulations are consistently cited by business leaders as a deterrent to expansion.
Property Tax Assessments: Property taxes have skyrocketed over the last 10 years for both businesses and residents which creates a huge cost burden on employers and their employees.
Proposed Colorado regulations are also driving out businesses
For example, in Denver two years ago there was a vote to ban all meat packing plants. Although the vote ultimately failed, if you were considering expanding or locating a new meat packing plant, Colorado would not even be on the list of prospective places.
There is a major labor bill that is being voted on later this year that also could radically alter the business friendly climate in Colorado:
Ballot Initiative 43. Sponsored by labor, Ballot Initiative 43 would require “just cause” to terminate or suspend any employee in the state of Colorado after six months of employment. Ballot Initiative 43 would also require written notice of “just cause” and a private right of action for an employee to proceed to court if “just cause” is lacking, with reinstatement, back and front pay, and attorneys’ fees all available to the employee. Long and short it would be very costly/difficult to terminate anyone in Colorado. This law alone would be a huge deterrent to any future investment in Colorado by major corporations.
Excessive regulations in Colorado have huge impacts on businesses
Here are some interesting statistics from the Colorado Chamber of Commerce: “This data is consistent with recent Colorado Chamber studies finding that our regulatory climate is driving business out of state. In our most recent annual business poll, almost half (46%) of Colorado business leaders said they will be making future investments out of state. When talking to companies that operate in other states, that number hits 83% — meaning only 17% of those companies intend to solely invest in Colorado.
When asked about the most important issues facing Colorado businesses, the answers were definitive: 48% of employers said regulations were their primary concern. Our pollster noted that our survey recorded the greatest concern about the state-level regulatory climate that he’s seen compared with other states where he polls.”
Colorado businesses voting with their feet and taking jobs
The chamber says companies are also relocating out-of-state. It released data showing that since 2019, 98 companies have either left the state, expanded elsewhere, or scrapped plans to move here.
Since 2022, Colorado has also had a net loss of 34 public company headquarters. Some of the states seeing gains from Colorado’s losses included Texas, California and North Carolina. Companies fleeing from Colorado had led to at least 13,000 lost jobs and a declining population for the first time in decades.
Colorado’s business climate is poised to go from bad to worse
The Chamber has accurately captured the sentiment of business leaders in the state. Unfortunately I see zero chance of Colorado turning more business friendly and a 100% probability that regulations are going to get worse in Colorado. Based on our current legislature, it seems that the only solution to any problem is more regulation even though more regulation is creating huge affordability problems, reductions in the tax base, etc… Furthermore, the Colorado legislature is so anti business that the regulations keep coming regardless of how radical the proposals are.
The numbers do not lie. Look at the chart above of Salt Lake City versus Denver, real estate prices are clearly showing the story. Our next-door neighbor is eating Colorado’s lunch: Utah has often been rated more competitive for smaller, fast-growing businesses due to a lower tax burden, flexible regulations, and lower operating costs. Furthermore Utah’s population continues growing while Colorado stagnates. The huge change in fortunes is not random. Companies are attracted to similar quality of life in Utah without the tax burden or regulatory uncertainty. Hopefully Colorado will look inward to reverse the trend before we become more like Illinois with a huge loss of companies and workers following.
Additional Reading/Resources:
https://www.summitdaily.com/news/colorado-business-investments-out-of-state/
https://coloradohardmoney.com/denver-will-vote-to-ban-one-business-in-the-city/
https://coloradohardmoney.com/denver-targets-businesses-again-this-time-it-will-hit-your-tank/
https://www.denverpost.com/2026/04/13/colorado-innovation-business-protest/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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