I'm really sorry to hear about your friend. I can't even imagine the kind of frustration they must be experiencing.
You're absolutly correct that CO has been a long-time popular destination to live for a multitude of reasons - but when it comes to my observations about the marijuana industry, I'm not wrong and I'm not speculating. The rec legalization DID cause a large influx of individuals and a lot of them were uprepared for how expensive Denver was and continues to be.
I'm not bagging on the industry - my wife is the operations manager for a large, multi-state dispensary and we have both seen the number of people, yes, mostly young, that show up ready to work, but were/are blown away by the fact that they make minimum wage. This has changed over the years and entry level bud-tenders can now make 17+ an hour with tips, but that is still difficult to live on here these days.
There is no one reason for the explosion of the homeless population. It is a multi faceted problem with no easy answers - but ultimately, it does come down to corporate greed and corrupt government officials.