New revenue figures out of Colorado show that legal recreational marijuana sales have surpassed medical marijuana sales. The milestone is largely symbolic, but the overall trend shows a strong increase in recreational sales since the spring.
One of the challenges facing Colorado’s legal marijuana market has been the slower-than-expected shift from medical to recreational sales. As the Brookings Institution’s John Hudak noted recently, “For years it has been an open secret in Colorado that some people were using medical marijuana without a legitimate medical condition. One goal of creating the retail market was to draw those gray-market users away from medical and toward recreational.”
But recreational marijuana is taxed at a much higher rate than medical weed, making it considerably more expensive. Many users opted to stick with the medical market, and still more have continued to buy marijuana through black market channels where it’s even less expensive.
Many legalization proponents welcomed the latest sales figures. But they don’t necessarily mean the imminent demise of Colorado’s black market. “I don’t think the increase in sales necessarily reflects a decrease in the black market, although it may,” Brookings’ Hudak said in an interview. The sales increase could be due to “increases in marijuana tourism – an industry growing pretty rapidly in the state.”
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A cultural shift is also likely under way, as more residents dip their feet in the recreational market. “It might reflect a relaxation of state residents where people are coming around and saying ‘Ok, this is real, this is legit and I’m not going to get arrested for it.'”
A recent NBC/Marist poll, for instance, found that the majority of Colorado adults – 55 percent – say they favor the legal status of marijuana there. And while the tax revenues from marijuana sales have been slower to materialize than expected, they are picking up steam.
Total revenue from marijuana taxes, licenses and fees topped 7 million dollars in June, and is likely to keep rising as more retail outlets enter the market.
If the latest sales figures do portend a shift from the black market and legal market, it will likely be due to a combination of higher quality and decreasing prices, Hudak said.
One last finding: July marked the first time that Denver County represented less than half of the total marijuana sales. This suggests that the marijuana market in Colorado is truly becoming statewide.
