July 2022 medical marijuana sales in Colorado were down by nearly half compared with July 2021, which is the lowest since legalization occurred nearly ten years ago.
According to Colorado Department of Revenue figures, the state racked up $153.9 million in total sales for recreational and medical marijuana in July, which was down 24% from $202.8 million in June of 2021. But for medical sales for July, the difference was much greater, down 48% from $35.0 million in 2021 to just $18.3 million in July 2022.
The state has done well from legal cannabis, with retail marijuana subject to a 15 percent sales tax and a 15 percent excise tax levied on the first transfer of marijuana from a wholesaler to a processor or retailer. Medical marijuana is subject to a 2.9 percent state sales tax, but not the excise tax.
Combined, the taxes raked more than USD $400 million into the state’s coffers in FY20-21. But given more recent sales figures and the hit the state will take in revenue, the Marijuana Industry Group (MIG) warns cannabis should not be treated as a cash cow.
“This perception is false, and it is simply unsustainable to treat this industry like a piggy bank for state and local governments,” said MIG board chair Tiffany Goldman. “Small cannabis businesses are closing their doors and patients are struggling to get treatment for chronic conditions, cancer, PTSD, and more, in large part due to unsustainable tax levels and burdensome regulations that make it impossible for this industry to thrive.”
On a related note, last week North Dakota’s Medical Marijuana Division Director raised concerns concerning recreational marijuana legalisation in his state could slash the number of patients registered in North Dakota’s medical marijuana program.
There appears to have been a pattern repeating emerging among states that go for full legalisation – their medical cannabis programs, and subsequently patients, suffer. It doesn’t seem any US state has been successful in striking a good balance between recreational and medicinal cannabis in terms of the impact on patients.
And there’s a lot at stake in Colorado in particular on both sides.
“With over 41,000 people directly employed by Colorado cannabis businesses, the marijuana industry is both a critical job provider and source of revenue for the state,” said Ms. Goldman.