According to a report by the Marijuana Policy Group, Colorado’s legal cannabis market has generated $2.39 billion in state output, created 18,005 new full-time-equivalent jobs, and was the second largest excise tax revenue source in 2015, with $121 million in combined sales and excise tax revenues.
“Marijuana tax revenues were three times larger than alcohol, and 14 percent larger than casino revenues. The MPG projects marijuana tax revenues will eclipse cigarette revenues by 2020, as cigarette sales continue to decline,” the authors said in the report. “Marijuana tax revenues will likely continue increasing as more consumer demand shifts into the taxed adult-use market.”
Cannabis spending creates “more output and employment per dollar spent than 90 percent” of other state industries, and demand is projected to grow 11.3 percent annually through 2020, the report says. The analysts expect state demand for cannabis will be 215.7 metric tons of flower equivalents by 2020, during which total sales value will peak near $1.52 billion.
The study found that the largest spending category for Colorado retailers is the cannabis itself, followed by payroll, rent, security, compliance, and consulting services. For cultivators, electricity and HVAC represent the largest spending categories, followed by fertilizers, pesticides, “other agricultural inputs,” and payrolls. Many of those services and products are handled by businesses operating in ancillary markets; and as the industry has become “structured, organized and competitive” a growing need for specialized law firms has developed, the researchers said.
“As the need for analysis and advice grows within the private sector and government agencies, so has the legal and consulting segment of the marijuana industry,” the report states. “Investment banking and business valuation services are additional examples of ancillary demand that are related to the marijuana industry.”
Additionally, the study shows that from 2014 to 2015 the US legal cannabis industry has grown 42.4 percent, reducing the informal market 36.2 percent. Colorado’s economy grew at 3.5 percent – double the national average of 1.75 percent. The report suggests that by 2020 Colorado’s market “will be fully saturated” but will still grow at 2 percent to 3.1 percent per year.