For the first five months of 2022, Colorado cannabis sales have declined 26.6% ($202.5 million) from the previous period in 2021 and are down 2.6% ($19.8 million) from the first five months of 2020. Cannabis sales, both recreational and medical, have been in a declining in Colorado since May of 2021. When looking at the previous 12 – month periods (Pandemic) we see those sales from June 2021 – May 2022 are down from the June 2020 – May 2021 period by a total of $347,041,050. But, when comparing sales from June 2021 – May 2022 with the (Pre-Pandemic) June 2019 – May 2020 period, total sales are up $164,864,387.
| Medical | Recreational | Total | ||
| From June ’21 – May ’22 | $325,549,887 | $1,701,094,907 | $2,026,644,794 | |
| From June ’20 – May ’21 | $461,400,300 | $1,912,285,544 | $2,373,685,844 | |
| From June ’19 – May ’20 | $369,670,507 | $1,492,109,909 | $1,861,780,416 |
It can be a little misleading when comparing Colorado’s cannabis sales during COVID with the sales after most restrictions were lifted. The first cases of COVID in Colorado were reported in March of 2020. Governor Jared Polis declared a state of emergency. On March 25, the state of Colorado was in a complete lock-down, with a stay-at-home order. Many companies began a work from home policy. Under strict guidelines, the Colorado cannabis industry was allowed to remain open. During this period, cannabis sales jumped. From the period of June 2020 – May 2021, sales had increased by over $500 million from the previous 12 months. With vaccinations available, most Colorado restrictions were lifted by June of 2021.
Another factor some industry analysts were point to as a cause of the decline in Colorado sales were the changes cannabis laws in the last two years for Arizona and New Mexico. Arizona legalized recreational cannabis in November of 2020, New Mexico legalized recreational cannabis in June of 2021.
It’s difficult to determine the number of visitors from Arizona and New Mexico that visited Colorado for their cannabis needs. But there are six Colorado counties that border New Mexico that sell cannabis. They are Archuleta, Conejos, Costilla, La Plata, Las Animas and Montezuma. In comparing cannabis sales for the first five months of 2021 prior to New Mexico legalizing cannabis, with the first five months of 2022, when cannabis was legal in New Mexico, Colorado cannabis sales for these six counties were down over $23 million.
| First Five Months | First Five Months | ||
| 2021 | 2022 | Total | |
| Archuleta | $ 6,888,599 | $ 5,256,678 | $ (1,631,921) |
| Conejos | $ 3,434,382 | $ 3,276,307 | $ (158,075) |
| Costilla | $ 2,960,683 | $ 2,004,613 | $ (956,070) |
| La Plata | $ 18,323,201 | $ 15,512,593 | $ (2,810,608) |
| Las Animas | $ 29,309,836 | $ 17,825,199 | $ (11,484,637) |
| Montezuma | $ 13,833,575 | $ 7,809,576 | $ (6,023,999) |
| $ (23,065,310) |
But it is interesting when looking at the first five months of 2022 compared with the first five months of 2020. In 2020, pre-COVID and prior to New Mexico legalizing recreational cannabis, Colorado cannabis sales in the six counties are down only $2.2 million.
| First Five Months | First Five Months | ||
| 2020 | 2022 | Total | |
| Archuleta | $ 4,431,030 | $ 5,256,678 | $ 825,648 |
| Conejos | —- | $ 3,276,307 | $ 3,276,307 |
| Costilla | $ 2,202,715 | $ 2,004,613 | $ (198,102) |
| La Plata | $ 13,539,324 | $ 15,512,593 | $ 1,973,269 |
| Las Animas | $ 22,627,595 | $ 17,825,199 | $ (4,802,396) |
| Montezuma | $ 11,096,248 | $ 7,809,576 | $ (3,286,672) |
| $ (2,211,946) |
Overall, COVID has had a large impact on cannabis sales in Colorado, but impact of neighboring states legalizing cannabis, may not have that much of an impact on Colorado as some people believe.
One of the biggest impacts of Colorado cannabis sales appears to be the passage of House Bill 1317 which represents stricter regulations on retail and medical marijuana concentrates. This measure limits the amount of concentrates that can be purchased daily. Previously, medical marijuana customers could purchase up to 40 grams of cannabis concentrates, which can contain more than 90 percent THC, a day. As of 2022, people older than 21 can acquire only eight grams of retail or medical product per business day. Those ages 18 to 20, who must have medical marijuana cards to legally buy cannabis, are restricted to two grams and will need two physicians from different practices—as opposed to the one required before 2022—to approve their medical cards. House Bill 1317 requires doctors to perform a mental health screening along with a physical exam before certifying medical cannabis use for patients younger than 21. The law also mandates that if doctors approve use, they must also provide a daily authorized quantity, a maximum recommended concentration level, instructions for use, and a recommended product.
It is believed that because of these new laws, medical marijuana sales in Colorado have decreased significantly with the lowest total sales through the first five months of the year since the department began tracking sales figures in 2014.
Based on the current trends and if they continue, Colorado is on pace to collect $75 – 80 million in tax revenues less compared to 2021. Dispensaries are currently on pace to sell just over $1.8 billion in 2022, the lowest amount since 2019 when Colorado cannabis sales were approximately $1.75 billion.
The logical reason for the decrease in sales can be tied to three factors:
- Adjustment in sales from the COVID high
- Colorado law changes
- Inflation that effects all markets