The Colorado cannabis industry’s unbridled growth hasn’t waned — in fact, it’s still setting records.
The state’s licensed marijuana shops captured nearly $132 million of recreational and medical cannabis sales in March, according to The Cannabist’s extrapolations of state sales tax data made public Tuesday.
The monthly sales haul of $131.7 million sets a record for Colorado’s relatively young legal marijuana industry, besting the previous high of $127.8 million set last September, The Cannabist’s calculations show. It’s the tenth consecutive month that sales have topped $100 million.
Sales tax revenue generated for the state during March was $22.9 million, according to the Colorado Department of Revenue.
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March’s sales totals were 48 percent higher than those tallied in March 2016, according to The Cannabist’s calculations. The month closes out a quarter in which sales were up nearly 36 percent from the first three months of last year.
In 2016, the year-over-year quarterly growth rate ranged between 29 percent and 39.6 percent.
The Cannabist also found that March 2017’s year-over-year percentage growth outpaced much of what was seen on a monthly basis last year. Monthly growth rates from calendar year 2015 to 2016 averaged nearly 34 percent.
It was this continued rate of growth that caught the attention of some analysts and economists contacted by The Cannabist.
Andrew Livingston, director of economics and research for cannabis law firm Vicente Sederberg, separately calculated out the year-over-year monthly growth rate for Colorado cannabis sales and saw a trend emerge.
“The year-over-year rates of growth have continued at a steady pace, which to me indicates that we have not yet reached the point at which we are starting to cap out the market,” he said.
At that point, he added, the growth rates would start to decline.
If the current growth rates keeps up, April 2017 should be another record month, and the summer of 2017 should set new highs, Livingston predicted.
And by the end of the year, that could add up to an industry boasting $1.6 billion in sales, he said.
“We’re surprised that sales continue to grow so quickly,” said Miles Light, an economist with the Marijuana Policy Group, a Denver-based financial, policy, research and consulting firm focused on the marijuana industry. “We are not surprised that almost all of the sales growth is in the retail marijuana space.”
Adult-use sales, which hit a new monthly high of $93.3 million, accounted for the lion’s share of the March totals. Medical cannabis transactions totaled $38.4 million.
Light and other economists have previously projected that Colorado’s marijuana market would eventually hit a ceiling as the draw from the black market becomes more complete, regular economic cycles take hold and other states implement adult-use sales.
It’s hard to predict when that plateau may occur, but the license and application fees in the March 2017 report were telling, Light said.
Ten months into Colorado’s fiscal year (the latest report for March sales show tax revenue remitted in April), the license and application fees for medical marijuana businesses and retail marijuana businesses were down 25.4 percent and 8.5 percent, respectively, according to the Colorado Department of Revenue report.
“This shows that fewer new firms are entering and, I believe, shows that … sales should be tapering off or declining,” he said.
Mark Bolton, marijuana advisor to Colorado Gov. John Hickenlooper, said the sales tax revenues tallying $185 million for the fiscal year-to-date are in line with expectations.
“We’re anticipating a significant increase (of marijuana tax revenue) this year,” he said. “I don’t think we’re anticipating any dramatic changes in the market. I guess we could potentially see some changes in the tourism market. We don’t anticipate any dramatic changes in our market with new states online.”