The State of Colorado released its full-year 2017 marijuana sales tax collections and the medical marijuana market continues to decline as users make the switch to recreational marijuana. The initial data showed that medical marijuana sales had slowed, but now the latest report demonstrates that sales are actually declining.
Matt Karnes, founder of GreenWave Advisors said that his estimates were remarkably close to the actual results. Medical marijuana sales were down year-over-year to $420 million in the full year 2017 versus $430 million in 2016 ’16. Recreational marijuana sales increased 30% year over year to $1.074 billion. His full year implied revenue estimates were $1.458 billion and the actual amount beat his estimate by 2% at $1.494 billion. This was an increase of 19% over 2016’s $1.256 billion
Karnes also believes that medical marijuana cardholders will decline as well. December figures haven’t been released yet, but he expects to see further deterioration in this area. “The disruption to the growth rate of a medical marijuana market when recreational use is legalized in a particular state is an outcome that we anticipated in 2014 when we launched coverage of the cannabis sector,” said Karnes. “This trend is important to note for those interested in obtaining a medical marijuana license in a newly legalized state because this initial permission basically serves as a call option for when a recreational market is established.”
Colorado has collected $247,368,473 in marijuana taxes, licenses, and fees for 2017. This tops the $193,604,810c that the state collected in 2016. Colorado reported that in 2017 (Jan – Nov) the state logged $1,379,429,765 in marijuana sales and to date since 2014 it was $4,365,748,232.
The state is pushing back against the Justice Department that recently rescinded the Cole Memorandum that provided some level of protection to the cannabis companies. The Cannabist reported that “Colorado lawmakers, including Representatives Ed Perlmutter, Diana DeGette and Jared Polis, and Sen. Cory Gardner, held a call to strategize on a push on marijuana-related measures — specifically crafting a spending bill provision to restrict the Justice Department from interfering with laws in Colorado and the 45 other states that have legalized cannabis in some form.”