Colorado Cannabis Sales Reached $15 Billion Since Legalization

When Colorado’s adult-use cannabis stores opened their doors in 2014, no one predicted how much the industry would contribute to the state’s financial growth. Overtaking all predictions, cannabis products have been sold in excess of $15 billion in 9 years, generating more than $2.5 billion in cannabis tax revenues that have fed a variety of public programs and services.

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Colorado cannabis sales

Through August, total Colorado cannabis sales have reached as much as $15 billion. In 2023 alone to date, cannabis sales have reached $1.05 billion, underscoring the industry’s economic potential.

The accumulated revenue from cannabis legalization over the past nine years has reached $2.55 billion through September, the Colorado Department of Revenue (CDOR) said in a press release.

Legalization Initiative vs. Tax Proceeds

Colorado became the first state to launch recreational cannabis sales after voters approved a legalization initiative on the 2012 ballot. Although annual sales peaked in 2021, when they totaled about $2.2 billion, they have declined somewhat since then and have stabilized over the past two years.

In August, an analysis by the nonpartisan State Legislative Council (LCS) found that Colorado generated more revenue from cannabis taxes than from alcohol or cigarettes in the last fiscal year. The $280 million in cannabis taxes went to various government programs and services, such as education and health care.

Examples of Spending from Cannabis Taxes

In Colorado, cannabis tax dollars fund a variety of services, including substance abuse treatment, preschool education, youth mentoring, bullying prevention, police officer training, supportive housing, research, and combating the illegal market.

CDOR explained in a new press release that the tax revenue comes from several sources: a 2.9% sales tax on cannabis, a 15% tax on cannabis products sold in stores, and a 15% retail excise tax applied to wholesale sales, as well as revenue from licensing fees and cannabis business license applications.

Colorado Governor and His Support for the Cannabis Industry

Colorado Governor Jared Polis (D) has been a longtime advocate of legalization and has worked to expand the existing industry, as well as push for reform at the federal level. Most recently, he supported President Joe Biden’s actions after his administration’s top health authority recommended reclassifying cannabis. Nevertheless, he stressed that this initial move must be followed up with further steps to address cannabis banking, justice system reform, and concerns about enforcement at the federal level.

Although Colorado cannabis sales have declined in recent years, other, newer markets with legal cannabis are often seeing record sales numbers this year. In Illinois, for example, officials recently boasted of “unprecedented growth” in the industry in fiscal year 2023, where regulated stores sold more than $1.5 billion worth of cannabis products.

Innovating and expanding the cannabis industry

In Colorado, the governor also urged legislators to take steps that would allow him to issue mass pardons for people with prior convictions for using psychedelic substances after he signed legislation in May to regulate substances such as psilocybin mushrooms and ayahuasca.

Polis also signed a law in June that allows the sale of cannabis online. This reform went into effect in August.

Conclusions and Perspectives

In analyzing the success of Colorado and other states, it is worth noting how crucial a properly structured legal and tax structure is to ensure the sustainability of the industry. The economic potential, as well as the social and medical benefits of legalizing cannabis, are enormous, but they also require responsibility and awareness on the part of producers, distributors and consumers alike.

The cannabis market, current and future, remains a fascinating area that requires constant observation and analysis, with both economic and social considerations. Colorado is a great example of how the right legal framework and public awareness can help create a valuable and ethical cannabis industry.

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(Featured image by  Budding. via Unsplash)

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