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The legal marijuana industry in Colorado continues to show record breaking growth every month this year. Colorado generated $700 million in revenue from marijuana ($385.9 million from medical and $313.2 million from recreational) during 2014. Those numbers, however, will be nothing compared to what the state generates during 2015.
Triple digit growth
During the month of April, the Colorado Department of Revenue reported that the state generated over $10.6 million in tax revenue from the sale of marijuana. During the same period last year, Colorado generated approximately $4.1 million in tax revenue. This represents the highest monthly increase since January 2015 (150% tax revenue increase).
The growth during the month of April is that much more significant because the January 2015 comparison was measured against the first month of legal marijuana in Colorado. In January 2014, there were only 30-40 recreational marijuana dispensaries open in Colorado. In December 2014, there were more than 300 recreational marijuana dispensaries.
During the first four months of 2015, Colorado generated $38.5 million in tax revenue from the sale and taxes associated with medical and recreational marijuana. During the same period last year, Colorado generated $16.7 million in tax revenue. This represents an increase of 129%!
An industry in its infancy
The Colorado cannabis industry is in its infancy. The industry is in the first inning of what will be a multi decade growth cycle. Our analysts expect these numbers to continue to increase year over year as the market develops and new businesses open.
It is important to note that these numbers only take into account the actual sale of marijuana and do not account for the revenue generated by ancillary businesses such as grow lights, soil, vaporizers, security equipment, and other products and/or services.
We expect to see Colorado continue to generate more revenue during 2015 due to the increased number of dispensaries operating in the state. Our analysts found that the number of dispensaries is one of the primary drivers of revenue growth for the legal marijuana industry.
Outlook
The cannabis industry is just getting started in Colorado and we believe that the state’s recently proposed tax decrease will attract new market participants. We expect to see Colorado’s revenue continue to grow at incremental rates until the number of dispensaries in the state levels off. Our analysts have determined that the number of dispensaries is directly correlated with market growth (not too surprising).
The increased number of dispensaries in Colorado has caused a significant surge in supply. The demand for legal marijuana, however, continues to outpace the supply and we do not expect this demand to simmer down anytime soon.
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