The Numbers Are In: Marijuana Businesses Still Winning in Colorado
More than four years after recreational marijuana became legal in Colorado, the state is continuing to post big numbers as a result of the blossoming cannabis economy. According to The Denver Post, Denver’s dispensaries recorded $587 million in sales in 2017, a record high, with sales continuing to rise into 2018. This was an increase of 16 percent over 2016. Sales throughout the state totaled $150.8 billion during the same time period, a 15 percent increase over 2016.
When broken down by recreational and medical marijuana, both the city of Denver and Colorado as a whole actually saw a decrease in medical cannabis sales, but the increase in recreational sales made up for the losses and then some. In Denver, medical sales dropped from $212 million to $206.4 million, while recreational retail sales spiked from $291.5 million to $377.5 million. Statewide, medical sales were $445 million in 2016 and $416.5 million in 2017, while recreational sales jumped from $861.6 million to $1.09 billion. When examined by location, while sales in Denver continue to climb, other regions in the state are starting to take a bigger percentage of the overall pie, which good news for those who live outside the big city.It is of no surprise to our experienced L.A. marijuana business attorneys that medical sales would lose ground to retail sales over time. Some people were using the medical marketplace for years to supplement their interest in marijuana for recreational purposes. Others find the process of obtaining a medical marijuana card and paying for doctor’s visits and fees to be cumbersome, especially when the federal classification of marijuana as a Schedule I narcotic prevents insurance companies from covering cannabis-based medications. Therefore they seek similar products from retail dispensaries instead that don’t require a doctor’s recommendation.
The one surprise, perhaps, is that the drop-off in medical sales in favor of recreational sales came several years after the January 2014 starting date of legal adult-use cannabis in the state. This data is valuable to California businesses who might also be examining the possibility of transitioning their focus from medical to recreational.
The taxes collected from the impressive revenue generated by the marijuana marketplace in the state make it self-sustaining, though it should be noted that marijuana taxes only make up 3.5 percent of the city’s general fund. Denver uses the tax revenue to pay for cannabis regulations, law enforcement, and drug abuse prevention programs. After those necessities are funded, the surplus is used for city maintenance, increased affordable housing, and programs that target the opioid crisis. Not only is cannabis helping to fund opioid intervention programs, but many are finding that consuming cannabis is a safer alternative to addictive opioids for pain relief, making this a win-win situation. Crime related to marijuana remains low, with only 1 percent of crimes across the state being connected to cannabis.
Californians are facing some rocky patches in the first year of recreational marijuana legalization. Regulations are driving up prices and causing product shortages, which are driving customers back to the black market. If the Colorado model is evidence, though, these wrinkles can successfully iron themselves out over time. While California has long been a trailblazer for the marijuana industry, state officials can learn a lot from Colorado’s example.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients, defendants, workers and those facing criminal marijuana charges. Call us at 949-375-4734.
The Denver Collaborative Approach: Leading the Way in Municipal Marijuana Management, City of Denver, 2018 Annual Report
More Blog Entries:
Report: Marijuana Legalization in Colorado Making Pot Cheaper for Consumers, Feb. 4, 2017, Cannabis Law Group