Sales of legal marijuana in Colorado are more potent than ever.
According to the Colorado Department of Revenue as of May 2016 revenue from recreational and medicinal marijuana sales totaled $486 million.
In April, sales hit an all-time high of $117 million but lost a little buzz, settling back down to $98.6 million May.
There were $588 million in recreational sales last year. Five months into 2016, $308 million has been spent on non-medicinal marijuana.
In 2015, a record 71.3 million tourists visited the state, although only 8% reported visiting a dispensary, according to Colorado tourism surveys from Strategic Marketing and Research Insight.
For tourists, recreational purchases at dispensaries are rather stress-free. Non-medicinal sales in the state only require a current United States ID and that the buyer be at least 21 years old.
“In one week at the store we saw visitors from all 50 states,” said Aaron Wellman, Recreational Sales Manager, at Natural Alternatives for Health in Fort Collins.
Although medical marijuana is only taxed by the average 2.9% state tax, the added revenue on recreational marijuana really rakes in the money.
All recreational purchases receive the 2.9% state sales tax, plus a 10% marijuana-specific sales tax and an additional 15% wholesale marijuana transfer excise tax.
For many first-time recreational bud buyers the 27.9% in taxes can be a shock.
To manage the impact of the weed tax, dispensaries such as Natural Alternatives for Health have rolled the taxes into the sticker price of their products.
If there is one buzzkill for all dispensaries, it’s the ability of the federal government to prosecute buyers who would otherwise have the protection of state recreational and medicinal laws.
“We can’t walk into most of the banks around here and get a loan because they are federally insured and don’t want anything to do with us,” said Wellman.
Dispensaries thus rely heavily on surveillance, safes, armed guards, armored car services and state banks to secure their earnings.
“We don’t like being taxed higher than other businesses, but when you’re a pioneer in an industry like this you have to pay the price to do business,” Wellman said.
Melinda Kadinger, Chief Financial Officer of Smokeys420 dispensary does not mind paying higher taxes either, but hates the double standard.
“The fact that the owners are not allowed to write off expenses that every other business can write off is inappropriate,” said Kadinger.
The recreational marijuana industry may be feeling the burn from the federal government, but it is encouraging an estimated 80-90% of once-illicit marijuana users to light up legally.
John Kagia, Executive Vice President of Industry Analytics at the Frontier Group, believes Colorado’s amazing five-month performance is part of a bigger picture.
“What we are seeing in Colorado is the cementing of strong growth in the consumer demand for cannabis,” Kagia said. “In the coming five years we anticipate aggressive growth in states where cannabis is already legal and in the new states coming on line.”
The recent growth in marijuana sales is sure push the already $5.4 billion United States marijuana industry to new highs.