It’s a pretty extraordinary milestone, and an indicator of just how financially strong the legal marijuana market has become.
In a little more than five years since becoming the first state to legalize recreational cannabis, Colorado says it’s gone past the $1 billion marks in marijuana tax revenue.
According to the Colorado Department of Revenue (CDOR), the state has brought in just over $1.02 billion from marijuana taxes, licensing and fees since legal sales began on January 1, 2014. And to date, cannabis sales in the Centennial State have exceeded $6.56 billion.
Vicente Sederberg, a Denver-based firm that specializes in cannabis law and policy, notes that the income generated by the state “does not include hundreds of millions of dollars in additional cannabis-related taxes and fees collected by local governments.”
And there are also the jobs and companies created by the state’s historic cannabis sector. CDOR says Colorado has currently had 2,917 licensed marijuana businesses and 41,076 individuals who are licensed to work in the industry. Leafly’s latest annual cannabis jobs count, published earlier this year, found that legal cannabis directly supported 31,486 full-time jobs in the state.
Where the Revenue Goes
That cannabis-generated tax revenue isn’t just sitting in the state’s coffers. The revenue funds a variety of Colorado programs.
On the education side it’s being allocated for, among other programs, school construction, early literacy, educational grants and anti-bullying initiatives.
Colorado’s Department of Human Services, meanwhile, is reportedly using marijuana revenue funds to support programs for community behavioral health, crisis services, criminal justice diversion, substance use disorder and detoxification services.
Out of the Pockets of Cartels
For Sal Pace, a former state representative and county commissioner in southern Colorado, as well as a longtime advocate of cannabis legalization in the state, these new financial numbers are vindicating.
“Think about it. That’s a billion dollars that was taken out of the pockets of the black market cartels and put towards communities,” Pace told Leafly. “This is pretty amazing; it surpassed all of our expectations.”
Pace currently sits on the Marijuana Policy Project’s board of directors and works with a variety of states in advancing their cannabis legalization efforts.
“In every state [working on cannabis legalization] you are going to find language that was borrowed from Colorado,” he said. “Colorado largely got it right, but there are lessons to be learned and opportunities for improvement as well.”
Colorado Gov. Jared Polis, another cannabis legalization advocate, said the new financial report shows that his state’s cannabis industry is thriving. But he warned that Colorado must remain competitive in the face of increasing national competition in the cannabis sector.
“We are always going to be relatively small potatoes on the actual sales,” Polis said in a recent interview with CNBC.
“We are just not going to be as big as states like California or New Jersey…We want to make sure that 10 years from now, point-of-sales systems, chemistry, genetics—all those pieces are housed here in Colorado with successful companies that power a multibillion national industry.”
Still Have Federal Problems
Aaron Smith, the co-founder and executive director of the National Cannabis Industry Association (NCIA), says he’s not surprised that Colorado reached the $1 billion revenue milestone.
“Cannabis has always been a popular adult product,” he said in an email to Leafly, “and Colorado voters made the wise decision to take it out of the criminal market so that sales revenues could benefit taxpayers, small businesses, and local communities rather than criminal drug dealers.”
But Smith pointed out some of the obstacles that Colorado and other cannabis-legal states still must deal with, due to the federal illegality of cannabis.
“From the limited access to banking services to the unfair burden imposed by tax code section 280E, outdated federal prohibition policies are the most significant challenges otherwise law-abiding cannabis professionals are facing today,” he added.
Other States and Tax Revenue
Smith believes the news out of Colorado is only a beginning for the legal cannabis sector. He pointed to NCIA’s recently updated State Progress Reportfor additional data that should make cannabis industry advocates optimistic.
“Over $1 billion in combined state tax revenue was collected from just the seven states with legal adult-use cannabis sales last year,” he said. “More states—including Michigan and Illinois—have already enacted their own sensible laws and will soon be tapping this new source of tax revenue while also safely regulating cannabis for adult consumers and beginning to repair the damage marijuana prohibition has caused marginalized communities for so many decades.”
The Answer is 64
Here’s something else to chew on, if you’re into numerology: Vicente Sederberg points out that this past April, the month when Colorado reached the $1 billion revenue mark, also happened to be the 64th month of legal marijuana sales under Colorado’s Amendment 64, the measure that the state’s voters approved back in 2012.