Marijuana money

(iStock image)

Coloradans and visitors to the state are spending nowhere near as much on marijuana products as they did at the height of the pandemic when many people were confined to home and cut off from other entertainment.

That’s a conclusion suggested by the latest round of cannabis sales reports released Tuesday by the Colorado Department of Revenue, which closely monitors tax proceeds from the state’s pot sales.

During July 2020, close to a midsummer spike following the pandemic’s outbreak, purchasers spent $226 million on combined recreational and medical cannabis — a highwater mark for the state market and a 36% increase over where sales had stood in July 2019, before the pandemic arrived.

But sales dropped dramatically during fall 2021 and have continued to decline in recent months, falling 35% below the market peak and 3.7% below where sales stood in early summer 2019.

The drop-off has been most evident in medical marijuana, first legalized in Colorado in 2000, down some 55% over the period since the market’s crest.

Meanwhile, the Denver Elections Division announced last week that petitioners were successful in placing an initiative on the city’s November ballot to hike the tax on recreational sales by another 4.5%.

And that has industry advocates concerned.

“That would raise the tax above 30%, far and away the highest in the state,” Truman Bradley, executive director of the Wheat Ridge-based Marijuana Industry Group, told The Denver Gazette.

Bradley says having less tax revenue is a major blow to Denver city programs that are funded by cannabis sales, including affordable housing, homelessness and youth violence prevention, immigrant legal services, and beginning this year, small business investment.

“It’s time for private interests to stop viewing the marijuana industry as their personal piggy bank,” Bradley continued.

Marijuana tax revenues in Denver were around $72 million in 2021, Bradley said, adding that the city provided $13.5 million from a special sales tax on recreational marijuana to fund free after-school and summer youth programs.

MIG, which closely monitors sales at stores, says the group sees consistent traffic numbers, but that spending per customer is down.

Advocates concede that inflation as well as a near-return-to-normal after officials loosened COVID restrictions have negatively affected sales. “The pandemic was certainly good for sales, and was good for alcohol sales,” Bradley said.

The new Denver ballot measure is similar to last November’s Colorado Proposition 119, which like the city initiative tied its potential revenue stream to after-class education programs for low-income kids. Proponents maintain that eligible families would receive stipends toward tutoring, mental health services and other educational enrichments. The statewide measure failed with voters.

“I think Denver voters will see through this,” Bradley said. He added that further revenue losses would put smaller cannabis operations at risk that are now laying off employees.

“What’s important is that stakeholders stop to think about whether this industry is a golden goose about to get killed.”

Sign Up For Free: Denver AM Update

Your morning rundown of the latest news from overnight and the stories to follow throughout the day.

Success! Thank you for subscribing to our newsletter.