Last year, Colorado reached a new high in legal cannabis sales. Research and financial analysis firm GreenWave Advisors estimates that sales reached $1.49 billion, up from its initial forecast of $1.45 billion. The state’s cannabis sales have increased every year since bringing in $699 million in 2014, the first year of legalized recreational sales.
The $1.49 billion is a 15 percent increase from 2016’s total of $1.3 billion; the first year cannabis sales topped $1 billion. Colorado reached the billion-dollar mark in just eight months in 2017. Sales equate to $247.4 million in tax revenue, which will be used to fund schools, law enforcement and statewide drug abuse assistance and awareness programs. Colorado raised the retail sales tax rate from 10 to 15 percent in July of last year, and the total generated from the new tax was $131.5 million.
Most notable about the $1.49 billion sold is that Colorado actually saw a decline in medical cannabis sales for the first time, dropping from $430 million last year to $420 million, while recreational sales increased by 30 percent to an estimated $1.07 billion. The trend is likely to continue, as medical patients no longer need to go through the traditional medical channels to obtain cannabis and can simply walk into any licensed dispensary to buy cannabis.
While the sales have increased since 2014, year-to-year revenue growth has declined. Colorado experienced 42 percent growth in cannabis sales in 2015, more than 30 percent in 2016 and nearly 15 percent last year. GreenWave Advisors’ estimate for 2018, $1.64 billion, would represent just a 10 percent year-over-year growth. The declining growth rate could be attributed to a more mature market or also to the falling prices of wholesale cannabis. Colorado’s producers have rushed to meet the high demand, which may have resulted in too much cannabis production.