The Colorado Department of Revenue (CDOR) recently released its monthly Marijuana Sales Report for February 2021. Total sales fell in February, which is not an atypical occurrence based on historical trends. However, tax data indicates increased wholesale trading and transfers in the adult-use market, yet Colorado’s Spot Index declined in February compared to the prior month.
In February, combined retail sales of adult-use and medical cannabis totaled over $167 million, down by 11% compared to January’s combined revenues of over $187.6 million. February 2021’s sales are up by 20.5% year-over-year, from over $138.6 million in the same month in 2020. After January 2021’s monthly sales showed an annual growth rate well in excess of that observed for 2020 overall, February’s fell below last year’s growth rate. Total retail sales expanded by about 26% in Colorado in 2020.
Adult-use retailers in Colorado tallied over $134.5 million in February. Revenues from the state’s adult-use sector in February were down by 11.3% compared to the over $151.7 million in retail sales generated in January, in addition to being up by 20.1% year-over-year. Retail revenues from the adult-use sector expanded by over 24% in 2020.
Medical cannabis revenues in February came to over $32.4 million, down by 9.5% from the over $35.8 million in sales tallied in January in that section of the market, but up by 22.2% 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 March 2021 – which corresponds generally to wholesale transfers and transactions executed in February – shows that the 15% excise tax on wholesale activity in Colorado’s adult-use system resulted in over $10.2 million accruing to state coffers. March’s wholesale excise tax receipts are up by 2.5% compared to tax collections from the previous month, which amounted to over $10 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 unchanged from January to February. (Since August 2017, AMRs are adjusted quarterly by the Colorado Department of Revenue.) As a result, tax collection data indicates that vertically integrated adult-use businesses moved increased amounts of product to associated retailers and processors in February as demand remains robust.
Colorado’s Spot Index trended downward again in February, extending behavior that was observed to commence in November 2020. For February as a whole, the state’s composite average price was down by 2.1% from January’s monthly mean.