Colorado has sold over $15 billion worth of cannabis since legalization

The Colorado Department of Revenue (DOR) released a monthly cannabis sales report for August, the most recent month available, showing adult-use and medical cannabis sales exceeded $15 billion.

Although the overall picture looks good, sales have actually declined in recent years since peaking during the pandemic, and the downward trend is worrying some analysts.

The data shows adult-use and medical cannabis sales in Colorado totaled $15,028,995,376. Since 2016, the state has sold $1 billion to $2 billion worth of cannabis each year. Sales in Colorado are expected to be lower in 2023 than in previous years due to oversupply issues that ultimately lead to lower prices.

The DOR’s marijuana sales reports summarize total monthly medical and retail cannabis sales by county. The Marijuana Sales Report provides total monthly sales for the state, and the Marijuana Sales Report by County shows monthly medical and adult-use cannabis store sales by county.

Adult-use cannabis sales began in Colorado in January 2014.

Sales are still up compared to when they launched in 2014, but have fallen sharply since their peak during the pandemic.

Colorado’s cannabis market was worth nearly $2.2 billion in 2020 and more than $2.2 billion in 2021 as many residents quarantined at home and federal stimulus checks gave people extra money.

That’s because state-owned pharmacies are struggling with an economic downturn.

Medical and adult-use cannabis sales plummeted in Colorado in June 2022, a downward trend that continues to this day.

Unless cannabis sales pick up in the third quarter of 2023, full-year cannabis sales could decline compared to 2022, when Colorado cannabis companies sold $1.7 billion in cannabis, matching 2019 sales. At the end of August, year-to-date sales were flat at just over $1 billion.

Cannabis sales in Denver, the state’s largest market

The decline in sales is acute in Colorado’s largest city and capital as well as the corresponding county. A July report from the city and county of Denver shows a 22% decline in annual cannabis sales revenue from 2021 to 2022, the largest annual decline since legalization began.

Consumers who are strapped for cash are buying less expensive products, Truman Bradley of the Marijuana Industry Group told 9 News.

“The impact on employees and customers also cannot be overstated,” he said. “When cannabis sales decline, tax revenue also declines.”

Denver accounts for about a third of the state’s total cannabis sales.

“In 2021, 31% of Colorado’s total marijuana sales occurred in the city and county of Denver,” said a 2022 report from Municipal Marijuana Management. “From 2014 to 2021, Denver’s share of marijuana sales increased All marijuana sales in Colorado decreased by 17%, from 48% to 31%. This downward trend, which has continued since the introduction of retail marijuana sales in 2014, suggests that growth in marijuana sales outside the City and County of Denver has increased more rapidly than within the city.”

A recent Denver Post report analyzes the post-pandemic impact of the cannabis industry in Colorado. “The market is just bad. It’s bad right now,” cannabis seller Val Tonazzi told the Denver Post. “Shops are closing left and right.”

Federal law affects sales in Colorado

Colorado Governor Jared Polis recently sent a letter to President Joe Biden on September 5th regarding the US Department of Health and Human Services (HHS) recommendation to the Drug Enforcement Administration (DEA) to ban cannabis from a substance Schedule I substance to be reclassified as a Schedule I substance III substance.

“We are pleased to hear that you recently received the recommendation from Health and Human Services (HHS) to add cannabis to Schedule III,” Polis began in his letter. “It’s time.”

“This is a historic moment and we owe you and your administration a great debt of gratitude for your leadership in catching up with the science,” Polis continued.

“The current classification of cannabis under federal law as a Schedule I drug is contradicted by scientific findings. The previously held assumption that cannabis has no recognized medical benefits, has a high potential for abuse, and lacks recognized safety standards even under medical supervision has been largely refuted. The HHS recommendation is evidence-based and a step in the right direction.”

Polis also addresses the problems that still need to be solved, such as banking. He wrote that if cannabis becomes a Schedule III substance, banks would be free to serve cannabis businesses and tax code 280E would no longer be required.

Oversupply, lack of demand, competition from neighboring legal states and black market sales are putting Colorado cannabis companies in a bind.