Everyone understands that legal cannabis is big business. But just exactly how big keeps surprising people and surpassing expectations. The great state of Colorado has the country’s oldest legal recreational cannabis industry. Voters passed Amendment 64 in 2012. Then, it took just over a year for the state to set up its drug policy and industry regulations. So on January 1, 2014, legal cannabis businesses sold their first ounces of licensed, legal marijuana. Since then, the state has seen nothing but green. Profits soared for cannabis growers and retailers. And the state of Colorado raked in mountains of cash through the taxes imposed on cannabis sales. Now, with 2016 coming to a close, it looks as though all these record-setting numbers are just the beginning. And that’s because Colorado cannabis sales just destroyed last year’s sales records.
Colorado Cannabis Sales – A Record-Shattering Milestone
2015 was a banner year for Colorado’s booming pot industry. But a particular milestone remained out of reach: the elusive $1 billion mark. In 2015, Colorado came just shy of hitting that jaw-dropping figure. In fact, the state missed it by just under $4 million, at $996,184,788. For the sake of argument, industry leaders rounded up that figure to an unofficial $1 billion.
But as of the end of October 2016, Colorado had officially surpassed $1 billion in cannabis sales and related products. In other words, it took the state just ten months to destroy the record it had set in all of 2015. New data from Colorado’s Department of Revenue shows that in October, recreational and medical cannabis shops sold over $1.1 billion in weed and related goods. Reports using that data described the Colorado cannabis industry as a “behemoth” making a $2.4 billion economic impact on the state.
Yeah, The Tax Man
The plans to use tax revenue from cannabis sales is working out better than policy designers anticipated. But skyrocketing tax revenues aren’t just benefiting the state. Indeed, cities and even counties and local municipalities are making out big time. The people who campaigned to make it legal ran on a platform of big promises. Revenue from marijuana sales, they argued, would fund public schools and dwindling government programs.
And they were right, tax revenue from weed continues its upward march every year. Industry lawyers tasked with overseeing the economic developments of cannabis in Colorado estimate that tax revenue from 2016 will actually total more than 2014 and 2015 taxes combined. “And that’s a conservative estimate,” adds Andrew Livingston, a lead cannabis attorney who directs his law firm’s research into the economics of legal pot. Already, tax totals from the October 2016 data show that $1.1 billion in sales has led to over $151 million in taxes. If November and December continue on the current trend, tax revenue for 2016 will easily best 2014 and 2015 totals combined.
So where is all that money going? As it turns out, $150 million is only about 1.5% of the total taxes collected by Colorado every year. So far, about $40 million has gone to upgrading schools, especially in rural districts. Legislators will decide what to do with the remaining money. So far, they’ve directed it to public health spending and drug treatment programs, since cannabis is newly legal.