Denver Archives - Green Market Report

William SumnerAugust 10, 2018
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3min31

Cannabis crime is down and tax revenue is up, according to an annual report released by the city of Denver, Colorado that analyzes the effect of cannabis legalization in the city. The report covers data from January 2017 to January 2018 and demonstrates the continued positive impact of cannabis legalization.

From 2016 to 2017, medical cannabis sales declined by 3% while retail cannabis sales in the city increased by 29%. Tax revenue generated by cannabis sales and licensing in 2017 increased by roughly 20% and for 2018 revenue is projected to increase by 8%. Overall, the tax revenue generated by cannabis sales represented approximately 3.4% of the city’s general fund revenue compared to 3.02% in 2016.

“We took on the daunting challenge of becoming the first major city in America to manage legalized recreational marijuana and we are having success,” Hancock said. “That’s because of coordination between Denver’s Excise and Licenses, Denver’s Fire Department, Police Department, Department of Public Health and Environment, Community Planning and Development, as well as our partners in other city agencies, the community from the marijuana industry and public health advocates.”

From 2014 to 2018, cannabis tax revenue contributed more than $11 million to the city’s “High Costs” youth prevention campaign as well as various youth-serving organizations funded by Denver’s Offices of Children’s Affairs and Behavioral Health. Additionally, $12.4 million in cannabis tax revenue was appropriated for deferred maintenance, affordable housing, and opioid intervention.

2018 RETAIL MARIJUANA SPECIAL SALES TAX AND STATE SHAREBACK ALLOCATION

Regulation: $2,385,647, 12%
Enforcement: $2,805,803, 13%
Education: $3,652,116, 17%
Public Health: $2,363,375, 11%
Improvement to City and Facilities: $10,000,000, 47%

Crime

Cannabis-related crime in 2017 represented less than 1% of overall crime in the city and declined from 0.42% in 2016 to 0.30% in 2017. Likewise, cannabis industry related crime fell from 0.32% in 2016 to 0.21% in 2017. The report stated that “Violent crime related to the licensed marijuana industry is rare, with seven reported in 2013, 10 reported in 2014, eight reported in 2015, three reported in 2016, and 8 reported in 2017.” Marijuana-related DUIDs stayed flat at 63 in 2016 and 63 in 2017.

In a statement, Denver Mayor Michael B. Hancock praised the report and stated that its results demonstrate that the city’s approach to cannabis legalization is working.

To view the full report, click the following link.


Melissa EbanksSeptember 27, 2017
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4min20

In November of 2012, twelve years after legalizing medical marijuana, Colorado voters approved a measure to legalize recreational marijuana use. The state adopted a model that allowed only existing marijuana dispensaries to convert to retail establishments.

New research from the Wisconsin School of Business at the University of Wisconsin–Madison reveals that property values in the immediate vicinity of Denver’s retail marijuana establishments increased by more than 8% since the law took effect on January 1, 2014.

Moussa Diop, Wisconsin School of Business assistant professor of real estate & urban land economics, along with James Conklin of the University of Georgia and Herman Li of California State University, say the relationship between the price of houses and retail conversions is particularly important with voters in four states legalizing recreational marijuana use last November and others likely to follow.

“The presence of retail marijuana establishments clearly had a short-term positive impact on nearby properties in Denver,” says Diop. “This suggests that in addition to the sales and business taxes generated from the retail marijuana industry, municipalities may experience an increase in property taxes. It’s an important piece of the puzzle as more and more voters and policy-makers look for evidence about the effects of legalizing recreational marijuana, as the issue is taken up by state legislatures across the country.”

Single family residences within 0.1 miles of a retail marijuana establishment saw an increase in value of approximately 8.4 percent compared to those located slightly further—between 0.1 miles and 0.25 miles—from the site. That increase in property value was estimated to be almost $27,000 for an average house in the area.

While the study did not seek to identify the underlying drivers of what led to an increase in property values near retail conversions, the authors did identify potential explanations including: a surge in housing demand spurred by marijuana-related employment growth; lower crime rates; and additional amenities locating in close proximity to retail conversions.

The findings are in line with a 2016 study that identified a six percent increase in housing values on average in municipalities across the state of Colorado that allowed retail marijuana sales. Colorado’s model of allowing only existing medical marijuana dispensaries to convert to retail establishments was also used in Oregon and will be implemented in Nevada. Other states may follow that same procedure, as the adoption of medical marijuana laws is typically seen as a first step to broader legalization efforts.

The study relied on residential property information from the City of Denver’s Open Data Catalog and a list of retail licenses granted by the Colorado Department of Revenue, the agency responsible for administering the new law.

The paper, “Contact High: The External Effects of Retail Marijuana Establishments on House Prices” will be published in Real Estate Economics.


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