The Colorado Department of Revenue recently issued a report about the size of the new legal marijuana market. The report, “Market Size And Demand For Marijuana In Colorado” shows that the demand for marijuana far exceeds earlier estimates. According to the report, statewide demand is currently over 120 tons per year. That is about 30% higher than a previous estimates by the Colorado Department of Revenue and almost 90% higher than the study by the Colorado Futures Center. The vast majority of the increase is the result of resident smokers consuming more than expected, but the growth of the retail market — particularly among tourists — is a strong sign for the success of legalization.
The state of Colorado takes in more tax revenue from recreational marijuana than medical marijuana. So the success of recreational legalization can be measured by the Colorado’s ability to make tons of cash from legalized marijuana taxes. For advocates, Colorado appears to be a victory and may become proof of concept for other states to follow. If Colorado can take in a substantial amount of tax revenue, legalization in Oregon, Massachusetts and Alaska become that much easier. And while most of the overall growth in the market size is due to residents — most likely medical customers — being heavier users than estimated, the report found that a substantial slice of the retail growth is due to tourism.
As expected, the market isn’t seeing a lot of residents switching from the medical market switch to the recreational market. But, according to the new report, the good news for legalization advocates is there has not been a shift from the medical market to the recreational market, but rather a shift from the black market and out-of-state black markets to the recreational market.