Photo by Andrew "Donovan" Valdivia on Unsplash
The Colorado Department of Revenue (CDOR) recently released its monthly Marijuana Sales Report for October. Sales in Colorado decreased for the third consecutive month in October but remained elevated significantly compared to last year. Colorado’s Spot Index rose to its highest levels of the year thus far in October, likely reflecting the sustained strong demand observed from May of this year.
In October, combined retail sales of adult-use and medical cannabis totaled over $199.7 million, down by 3.2% compared to September’s combined revenues of over $206.4 million. October is the third straight month to see a decline in total sales, after they peaked in July. Historical trends show that monthly sales typically begin to decline in September after peaking for the year in August.
October 2020’s cumulative sales total represents an increase of 32.8% year-over-year. This annual growth rate is steady compared to that for September’s sales. Through the first 10 months of 2020, Colorado medical and adult-use retailers have racked up combined sales totaling almost $1.83 billion, up by 25% compared to over $1.46 billion in total year-to-date sales through the same period last year. Year-to-date sales through October 2020 have also surpassed the full-year total of over $1.74 billion for Colorado’s adult-use and medical markets in 2019.
Adult-use retailers in Colorado tallied just under $161 million in October. Revenues from the state’s adult-use sector in October were down by 3.3% compared to the over $166.5 million in retail sales generated in September. October 2020’s adult-use sales are up 32.8% from those documented for the same month in 2019.
Year-to-date sales in the adult-use portion of the market have reached over $1.45 billion 10 months into 2020, outpacing by 23.7% the over $1.17 billion in recreational revenue through the first nine months of 2019. In 2019, annual revenue generated by recreational retailers grew by 16.2% compared to the year prior. As with total sales, adult-use revenues 10 months into 2020 have surpassed 2019’s full-year total, which was just under $1.41 billion.
Medical cannabis revenues in October came to over $38.7 million, down by 2.9% from the over $39.9 million in sales tallied in September in that section of the market. Retail sales in Colorado’s medical market in October 2020 are up by 32.7% year-over-year, relative to over $29.2 million in October 2019.
In the wholesale realm, tax collection data for November 2020 – which corresponds generally to wholesale transfers and transactions executed in October – 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. November’s wholesale excise tax receipts are up by 15.6% compared to tax collections from the previous month, which amounted to over $8.82 million. November is only the second time that receipts from this levy have topped $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 adjusted in October. (Since August 2017, AMRs are adjusted quarterly by the Colorado Department of Revenue.) In October, the AMR for flower jumped by 31.6%; that for trim also increased, while those for other plant material decreased or were relatively stable. Overall, the increase in collections from the wholesale excise tax must be attributed in large part to the significant rise in the AMR for flower and may not necessarily reflect an expansion of wholesale trading and transfers generally.