Colorado Retail Cannabis Sales Continue to Reach Record Levels

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The Trend of Increasing Colorado Retail Cannabis Sales in
the Summer Months Exceeds Previous Years’ Performance

The Colorado Department of Revenue
(CDOR) recently released its monthly Marijuana Sales Report for June 2019. Overall
retail demand increased once again, with cumulative sales by adult-use
storefronts and medical dispensaries reaching a new record high for the state’s
market, in addition to adult-use revenues doing so on their own. Meanwhile,
wholesale excise tax collections suggest contracting trading and transfer
volume in June, perhaps reflecting tighter supply in the face of persistently
strong sales. The current upward trend displayed by Colorado’s Spot Index
commenced in June.

In June, combined retail sales of
adult-use and medical cannabis totaled over $152 million, up by 6.2% compared
to May’s combined revenues of over $143.1 million. June’s total monthly sales
represent a new record high for Colorado’s market for the second consecutive
month, as well as the third time such a milestone has been established in the
first six months of 2019.

An uptick in cumulative monthly
sales from May to June has become customary in Colorado. However, the magnitude
by which total retail revenues increased this year is greater than in prior
ones. In 2016, cumulative monthly sales rose by 4.5% from May to June. 2017 saw
a 4.4% increase in the same span, while the proportional rise in the period
under discussion in 2018 was 5.4%.

Year-to-date retail revenues as of
June totaled over $817.7 million, up by 10.1% from the over $742.3 million
documented in the first six months of 2018. Total sales through the first five
months of this year were up by less than 9% compared to the same period in 2018,
indicating that the pace of year-over-year sales growth in Colorado in 2019
accelerated in June, as it did in each of the two months prior.

Adult-use retailers in Colorado
tallied over $122.3 million in June. Revenues from the state’s adult-use sector
in June were up by 7.7% compared to the over $113.6 million in retail sales
generated in May. June’s adult-use sales represent a new record high for that
sector of Colorado’s market, topping the previous peak of over $114.3 million
documented in March of this year. As of June 2019, year-to-date sales in the
adult-use sector reached over $652.8 million, up by 13.2% compared to over
$576.9 million in retail revenue generated by recreational storefronts through
the first six months of 2018.

Medical cannabis revenues in June
came to over $29.6 million, up by 0.7% from the over $29.4 million in sales
tallied in May in that section of the market. From January through June of this
year, Colorado’s retail sales in the medical portion of the market totaled over
$164.9 million, down by 0.4% from over $165.4 million in medical cannabis sales
through the first six months of 2018.      

In the wholesale realm, tax
collection data for July 2019
– which
corresponds generally to wholesale transfers and transactions executed in June
– shows that the 15% excise tax on wholesale activity in Colorado’s adult-use
system resulted in over $5.64 million accruing to state coffers. July’s
wholesale excise tax receipts are down by 6% compared to tax collections from
the previous month, which amounted to just over $6 million.

Average Market Rates (AMRs) used
by the state to assess the wholesale excise tax on internal transfers of
flower, trim, and other plant material between commonly-owned licenses were
constant from May to June (Since August 2017, AMRs are adjusted quarterly by
the Colorado Department of Revenue (CDOR).) As a result, it appears that overall
wholesale trading and transfer volume in Colorado’s market in June contracted
compared to the month before, despite strong sales in the adult-use market in
both May and June.

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