2.8 Million Pot Munchies and Other Numbers From Colorado's First Year of Retail Weed
Colorado’s grand marijuana-retail experiment resulted in almost 20 tons of pot sold to recreational users in 2014.
It was the first year of legal recreational sales in the state, thus the first time a statewide retail market for marijuana could be quantified. Before Colorado, no government in the U.S. had ever allowed retail sales. The state had previously allowed medical pot, which has low taxes but requires a doctor’s note. Recreational marijuana sales, which became legal in January 2014, opened the doors to any buyer age 21 and over. Retail sales carry a heavy tax burden. Colorado collected $63 million in tax revenue and an additional $13 million in licenses and fees on $699 million of combined medical and recreational pot sales in 2014.
To track and enforce the market—and to collect those lucrative taxes—Colorado required all growers and sellers to trace their product from seed to sale with canary-yellow RFID tags. A new report from the Colorado Marijuana Enforcement Division (PDF) provides the first glimpse of that data over a full year. The increasing market for recreational pot both complements and at times surpasses the state’s medical sales:
Growers weren’t allowed to cultivate plants exclusively for recreational use until January 2014. The expansion of the recreational pot supply has been explosive ever since, with about eight times more plants under cultivation at the end of 2014 than had been growing in January. Medical providers are still planting their supply at a steady pace, too, in a sign that retail pot hasn’t dramatically reduced the medical market. Last year, according to analysis by the Washington Post, medical sales in Colorado exceeded recreational sales by $75 million.
The data don’t show whether the medical dispensaries are serving the same customers or if some of the medical customers have shifted to recreational sellers. Regulators had hoped buyers on the black market and “patients” without true medical needs would become retail customers. The new rules tried to make retail sales so easy that recreational users wouldn’t obtain medical cards to evade the extra taxes. The stability of the medical market in Colorado has implications for other places, such as Washington state, where medical dispensaries have been resisting regulation, saying it would drive them out of business.
Instead of eroding medical sales, the recreational stores expanded the overall size of the legal market. By the end of the year, retail pot made up about a third of the market. In December, retail customers bought 4,949 pounds of bud, compared with 8,799 pounds of medical flower. All told, retailers sold almost 40,000 pounds of pot in 2014.
One market where retail stores have dominated medical dispensaries is the sale of marijuana-infused edible products, which include gummy bears, tapenade—and, yes, brownies. Sales of foods made with marijuana helped retail sales of edibles surpass those at medical dispensaries by April. By the end of 2014 the edible retail market had swollen to twice the size of the longer-established medical side of the business. It was, in fact, a busy Christmas shopping season for edible-pot vendors: December saw almost 360,000 marijuana-infused items sold across the state, making it the single busiest month of the year. Colorado says the trend “suggests that retail marijuana products are a viable product for retail consumers.” The report also notes that across almost 4,000 tests, more than 98 percent of the edibles complied with the limits on how potent they can be.
Even though the state legalized sales, cities in Colorado can still ban both medical and recreational pot. While some of the state’s large population centers, including Denver and Fort Collins, allow both types of sales, more than three-quarters of localities ban recreational marijuana—a reminder of just how young this market still is.
(Corrects the list of cities that allow recreational marijuana sales.)
For more, read this QuickTake: The Legalization of Marijuana
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