Denver’s Illegal Cannabis Activity Falls, but So Do Legal Sales

Mayor Michael Hancock called Denver the "the gold standard for cannabis regulation."

Nearly a decade after Colorado ushered in legal adult-use cannabis sales, police in the state’s capital city report a significant drop in illicit product on the streets.

According to the report from Denver’s municipal government, the city – which was the first in the U.S. to open adult-use marijuana retailers – has seen a 74% reduction in the amount of illegal marijuana processed by police since 2014. Denver’s leaders attribute that to a decrease in demand for unregulated products and the potential deprioritization of cannabis enforcement in the area’s current legal environment.

The city’s legal cannabis industry hasn’t been without its challenges, though. Data shows that overall cannabis sales in the state began to decline in 2022, falling 22% from the previous year. Denver registered the steepest decline, with marijuana sales decreasing 28% for the period.

Despite the sales dip, Colorado still raked in $54.8 million in cannabis tax revenue in 2022, funds the state used to address homelessness and housing affordability, in addition to education, prevention, regulation, and enforcement initiatives.

In a letter introducing the report, Denver Mayor Michael Hancock praised the city’s ability to regulate cannabis effectively, claiming that it set a global standard.

“Denver has embraced a management model that is quick, responsive, and nimble in collaboration with a fast-developing and innovative industry,” Hancock wrote.

The downturn in cannabis sales has been linked to several factors, including reduced foot traffic and tourism, increased minimum wage and regulations, and intense competition. Consequently, some businesses are considering relocating or closing down entirely if the situation doesn’t improve.

The report also pointed to a dearth of marijuana-related offenses, which now constitute only 1% of all reported offenses in Denver. Out of 87,791 total criminal offenses in 2022, only 263 were clearly related to marijuana.

Hancock noted in the report that contrary to initial concerns, youth cannabis use and crime did not spike following marijuana legalization.

“When Amendment 64 to legalize marijuana was put to Colorado voters, many feared that youth marijuana use and crime would skyrocket. To date, none of the extreme negative predictions about legalization have come to pass in the Mile High City,” Hancock wrote.

Still, the city’s social equity program, established in 2021 to boost industry participation by individuals disproportionately impacted by criminalization, seems to be struggling. Of the 1,017 registered marijuana businesses in Denver, only 20 are owned by social equity licensees, with white individuals accounting for 90% of cannabis business ownership.

Hancock stressed the need for the city to continue its efforts toward social equity within the cannabis industry: “Denver has developed a multipronged approach to remove barriers and implement changes through its social equity program so there is more equitable access to the cannabis industry and the city can achieve the full promise of legalization.”

A Denver Department of Excise and Licenses spokesperson told Marijuana Moment that 32 approved and 31 pending social equity qualified applicants are now part of the initiative, which they claimed is “one of the most successful social equity programs in U.S. history.”

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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