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The Colorado Department of Revenue (CDOR) recently released its monthly Marijuana Sales Report for January 2021. Total sales increased to open a year for the first time since January 2015, the beginning of the second year of legal adult-use cannabis sales in the state. Even as demand expanded uncharacteristically in January, however, Colorado’s Spot Index declined compared to December 2020.
In January, combined retail sales of adult-use and medical cannabis totaled over $187.6 million, up by 0.7% compared to December 2020’s combined revenues of over $186.3 million. January 2021’s sales are up by 34.8% year-over-year, from over $139.1 million in the same month in 2020, exceeding last year’s growth in annual revenue. As we noted in our most recent discussion of sales in Colorado, total retail sales grew by about 26% in 2020.
Adult-use retailers in Colorado tallied over $151.7 million in January. Revenues from the state’s adult-use sector in January 2021 were up by 1.4% compared to the over $149.6 million in retail sales generated in December 2020, in addition to being up by 35.9% year-over-year. Retail revenues from the adult-use sector expanded by over 24% in 2020.
Medical cannabis revenues in January came to over $35.8 million, down by 2.1% from the over $36.6 million in sales tallied in December in that section of the market, but up by 30.6% year-over-year. Retail sales in Colorado’s medical market in 2020 climbed by 30.8% from 2019.
In the wholesale realm, tax collection data for February 2021 – which corresponds generally to wholesale transfers and transactions executed in January – shows that the 15% excise tax on wholesale activity in Colorado’s adult-use system resulted in over $10 million accruing to state coffers. February’s wholesale excise tax receipts are down by 3.8% compared to tax collections from the previous month, which amounted to over $10.4 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 adult-use licenses were in numerous cases on the rise from December 2020 to January 2021. (Since August 2017, AMRs are adjusted quarterly by the Colorado Department of Revenue.) In our report for December 18, 2020, we noted that state officials announced AMRs for Q1 2021 that for the most part represented increases from the rates in effect in Q4 2020; significant ones in some cases, such as an over 30% rise in the AMR for flower. Consequently, vertically integrated adult-use businesses likely moved increased amounts of product to associated retailers and processors in December 2020 in order to pay lower tax while they could.
Colorado’s Spot Index trended downward again in January, extending behavior that was observed to commence in November 2020. For January as a whole, the state’s average composite price was down by 6.1% from December’s monthly mean.