Why Marijuana Sales Continue to Increase in Colorado
It seems every year tops the last in Colorado marijuana sales. Colorado scored in at $1.3 billion in sales in 2016. This year it is expected to increase ten-fold. The Colorado Department of Revenue recently released sales data showing ten consecutive months where marijuana sales have surpassed $100 million, averaging out a total retail revenue of $125M. Sales have increased so much that the state revenue collections from taxes and licensing fees are almost 50 percent above where they stood last year. These taxes mainly go toward public education, grants and partially to rehabilitating the homeless in Colorado.
Why the Increase?
One reason is said be the continuation of moving pot sales off the black market and into legalized businesses. Marijuana Policy Group research associate Clinton Saloga told ThinkProgress “The continued rise in sales is due more to people leaving the black market and starting to shop in the regulated market, as opposed to a huge surge in total use.”
“It’s hard to say with a straight face that a lot of people are coming to Colorado just to smoke pot. Colorado has a million attractions,” Saloga said, “and if you look back at the trends, Colorado and the Denver area were increasing across all [tourism and economic] measures before legalization.”
As more marijuana sales are exposed, legalized and tracked, Colorado gets a better idea of the actual numbers. Getting the black market out of the dark and into commercial light not only helps the consumer, but also helps federal understanding of how successful the industry is becoming. The higher the success rate, the more likely other states will become legalized.
The Trump Scare of 2017
According to Marijuana Business Daily, another speculation for the increase in sales could be from Trump’s scare of shutting down all legal cannabis business. Back in March of 2017, Attorney General Jeff Sessions gave a speech that made millions of patients and cannabis consumers stop dead. He said in his speech,
“I realize this may be an unfashionable belief in a time of growing tolerance of drug use. But too many lives are at stake to worry about being fashionable. I reject the idea that America will be a better place if marijuana is sold in every corner store. And I am astonished to hear people suggest that we can solve our heroin crisis by legalizing marijuana — so people can trade one life-wrecking dependency for another that’s only slightly less awful. Our nation needs to say clearly once again that using drugs will destroy your life.”
To say the least, people were scared. Undoing the legalization of marijuana was enough to push people into stockpiling as much marijuana as they could buy.
Pushing out the Small Guys
Another factor to consider is the increasingly competitive market. More and more businesses are pushing out the small guys and rising above their competitors. When the industry first started, edibles and other new innovations seemed brilliant novelties. Whoever thought of it first was sure to be the successor. The same applied to dispensaries. Now that legalization carries on and the industry grows larger, there are tens of hundreds of companies trying to do the same thing, only better. Cannabis is a growing industry, one where businesses have to fight to keep their place in the market, which means thinking more strategically, strengthening their sales and keeping ahead of the curve in market trends.
Michael Lee, a dispensary owner, told the Denver Post about the crippling effect of the competitive market. “I don’t know how anyone can survive this pressure,” Lee said. “I just can’t keep doing this. I want to get out.”
The article, dated 2013, describes the green rush of cannabis with a total of 1,131 dispensaries at the end of 2010, the year marijuana became legal. Three years later, that number went down to 675 dispensaries. Today, 485 dispensaries. As the number continues to decline, bigger businesses grow stronger and consumer demand pushes retail prices higher.
Marijuana sales don’t seem to be capping anytime soon. The faster legalization grows through the country, the more money is gained for creating new jobs, bettering patient treatment and helping public education.