Ever since recreational marijuana has been allowed in the state of Colorado in 2014, its sales have steadily increased, finally reaching an all-time high of $2.22 billion in the year 2021.
In the first year of its launching, that is in 2014, the income from the sales of recreational marijuana amounted to $683 million. It continued to rise, grossing $1.3 billion in 2016, thereby crossing the $1 billion mark.
After four years, in the year 2020, when it crossed the $2 billion mark, the amount was $2.19 billion, from where it further rose to $2.22 billion in 2021, thereby making the total sales in eight years a whopping $12.2 billion.
Most of the money earned is from the sale of recreational marijuana. Of the 64 counties of the state, Denver has recorded the maximum sales.
Sales proceeds from medical marijuana have not recorded an equally high increase over the years. Revenue from medical marijuana sales has been more or less steady from 2014, though there were minor increases now and then.
During the eight years from 2014 to 2021, annual proceeds from the sales of medical marijuana were less than $50 million.
The tax revenue collected was $423 million in 2021, and the total tax revenue collected by then from February 2014 was above $2 billion. The cannabis business owners of Colorado are not very happy despite the high sales.
According to them, the sales tax of 2.9% within the state, retail sales tax of 15%, and excise duty of 15%, together significantly affect the profit margin. Besides these, there may be some local taxes applicable, depending upon the location of the business.
According to Tiffany Goldman, the chairman of the board of the MIG or Marijuana Industry Group of Colorado, the high sales revenue is not fully reflective of the industry’s performance because good sales alone cannot make a business successful.
MIG, established in 2010, is an association of cannabis businessmen and their supporters. It is the largest and oldest association of cannabis businesses and has among its members about 400 licensed businesses. The members work with policymakers and authorities to solve the issues faced by the cannabis industry.
Goldman said that as a small-time cannabis business owner himself, he was only too aware of the hazards involved in running a cannabis business within the framework of its regulations and the taxes imposed on it.
He added that the business owners were hopeful that the authorities would understand their plight and support them in overcoming the existing challenges so that the cannabis industry would be able to record better profits and become more financially viable in the coming years.