A September economic report shows the drop in marijuana sales is slowing, but it’ll be a few years before the market stabilizes
News News | Sep 28, 2024
ateres-martinez@steamboatpilot.com A cultivator from IgadI in Tabernash tends plants in this archive photo from 2015. Colorado’s marijuana sales and tax revenue are back on the decline after a hopeful end to 2023, indicating there’s more fueling the market than simply recovering from the pandemic.
The falling demand is largely due to two main factors: decreased consumption following a pandemic-fueled surge and the legalization of marijuana across other states in the country, according to the September 2024 Economic and Revenue Forecast report .
Presented by the Colorado Legislative Council Staff, preliminary numbers for the 2023-24 fiscal year show a 12.8% decrease in total tax revenue from the marijuana industry compared to the year before. Colorado’s marijuana tax revenue reached $248.2 million in 2023-24, according to the report. The forecast for the next fiscal year is expected to continue falling before hitting a 3.2% increase in 2025-26.
Most of the state’s revenue from marijuana comes from its 15% excise tax and 15% sales tax, as well as the 2.9% state sales tax on medical marijuana.
Lowered revenue doesn’t directly translate to lower sales, however, as an “oversupply of marijuana” has resulted in lower prices at wholesale and retail levels, according to the report. Recovering from the pandemic
Marijuana restrictions during the pandemic resulted in a heightened demand from 2020 to 2021, increasing wholesale prices by over 30%. August 2020 saw the largest sum ever collected in marijuana taxes for Colorado, at nearly $39.7 million . Total recreational and medical marijuana sales for that month reached $218.6 million , according to data from Colorado Department of Revenue.
Prices quickly flipped and became the cheapest they have been in several years — around 63% lower — between 2021 and April 2023 when restrictions began to lift and demand started to go down again. After a slight recovery at the end of 2023, prices in Colorado are seeing a dip once again. In June 2024, tax revenue from marijuana reached […]
Colorado among states with the biggest decline in marijuana tax revenue as more states legalize
