With inflation skyrocketing, Coloradans are curbing their retail purchases of cannabis, according to tax data released by the state on Tuesday.
That’s particularly true of medical marijuana sales, according to monthly tallies by the Colorado Department of Revenue. Medical marijuana revenue for May was $20,742,830, almost a 44% drop from a year ago.
Recreational pot sales were off as well, $127,061,610 in May, down 19% from the year before. Total statewide cannabis sales in May were $147,804,440, a 24% drop from May 2021.
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“It’s the question of the year,” says cannabis market expert Paul Seaborn, who in 2014 published one of the first marijuana business case studies while he was at the University of Denver’s Daniels College of Business.
“It’s a novelty, because I remember when Colorado was setting a new sales record every year,” says Seaborn, who now is at University of Virginia’s McIntire School of Commerce.
“There was a national mini-boom in cannabis sales during COVID, and now maybe we’re seeing a reverse of that trend,” he added.
Meanwhile, other jurisdictions have loosened regulations on sales, particularly on medical marijuana, just as Colorado’s market is coming to grips with House Bill 21-1317, which was passed into law a year ago and adds restrictions to the requirements for obtaining a medical marijuana card.
In Washington, D.C., prospective users can now self-test to gain access to medical pot products, Seaborn says. Virginia has loosened restrictions, while Oklahoma has become a particularly open market, he says.
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MIG, the Colorado marijuana industry group, is once again warning about the dangers to tax revenues for public services ranging from affordable housing to education that will likely be affected by declining marijuana sales.
“Ever-increasing taxes and burdensome regulations continue to push the industry to the brink and decrease revenue for critical programs,” the trade group said in a release shortly after the tax report came out.
Drop-offs in drug demand have a historical basis, said drug historian Emily Dufton, author of “Grass Roots: The Rise and Fall and Rise of Marijuana in America” (Basic Books, 2017). From its rising tide in the early 1960s in California, the legalization movement crested in the late 1970s, but saw a drop-off as concerns rose about use by minors, culminating in the Just Say No movement.
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Dufton says her recent interviews with high school and college students suggest that legalization, while making the drug less accessible to kids, has taken away some of cannabis’ forbidden cache.
“College students say it’s boring,” she says.
The sharp drop in medical sales is stunning, but not completely surprising, Dufton says. Patients have often felt turned away from the medical marketplace, finding recreational dispensaries to be cheaper, she says.