Colorado’s monthly marijuana sales notched an all-time high in July 2016 as shops sold nearly $122.7 million of medical and recreational cannabis — a 27 percent increase from July 2015, according to state revenue data released Monday.
The monthly haul surpasses the previous record notched this past April — a month that includes the annual 4/20 marijuana holiday — when $117.4 million of flower, edibles and concentrates were sold. Medical sales accounted for $40.8 million and recreational sales accounted for roughly $76.6 million of April’s total.
In July, recreational sales shot to $83.8 million, according to the Colorado Department of Revenue report.
The record revenue is most likely attributable to a summertime sales spike, said Adam Orens, a managing director of Denver-based BBC Research & Consulting and founding partner of the Marijuana Policy Group.
“That’s when I think more people — Colorado residents plus tourists — people are just out and about,” he said. “There are backyard parties, it’s events of all different kinds, concerts, festivals. I believe it drives more people to consume more alcohol and marijuana.”
Last year, apart from December, the months with the largest marijuana sales totals were July, August and September, according to state revenue data.
Starting in June of this year, a new state law allowed tourists visiting Colorado to buy up to one ounce of marijuana per day. The previous daily limit for non-residents was a quarter-ounce per person.
Bolstered by the record month, Colorado’s marijuana industry generated $720.4 million in sales through the first seven months of the year, with recreational and medical accounting for about $465 million and $255.4 million, respectively. During the first seven months of 2015, marijuana sales totaled $538 million.
The record July and banner year-to-date mean that Colorado’s coffers are getting a little boost.
Through July, the industry has resulted in nearly $105.8 million in taxes and fees put toward state funds such as educational capital construction grants and health programs.
Those year-to-date totals and the Colorado Legislative Council’s fiscal 2015-2016 revenue forecast of $135 million would only make up a sliver of the state’s $10 billion general fund and wouldn’t be enough to fully fill the $831 million K-12 education funding shortfall, also referred to as the “negative factor,” said Chris Stiffler, economist for the Colorado Fiscal Institute.
Colorado is on pace to record more than $40 million in retail marijuana excise taxes, which would then allow for additional funding to be used beyond capital construction, industry observers have said.
Stiffler estimates that the marijuana tax revenue eventually will flatten out to around $140 million to $150 million per fiscal year.
“It’s in no way a saving grace for the budget,” he said. “We’re certainly seeing benefits, but in no way are we supplanting the cuts to K-12, roads and higher education.”
Colorado’s marijuana sales will eventually settle down from their current breakneck pace, said the Marijuana Policy Group’s Orens, noting that it’s impossible to know just when that will happen.
“Every year, we’ve had more sales than the year before; at the same time, you’ve seen prices in general declining,” he said. “This rapid growth represents people coming from the black market into the regulated market, and that growth is going to be fast, but it’s going to be finite.”
That coupled with any revenue draw from when new adult-use markets come online in other states could cause sales to reach that ceiling even faster, he said. Wholesale price declines also may diminish the per-transaction tax collections, he said.
“I think the state should be conscious of this,” he said. “We’re seeing all this crazy growth in these first few years. It’s not going to be like this forever.”