The Colorado Department of Revenue (CDOR) recently released its monthly Marijuana Sales Report for April 2021. Demand remained strong; although April’s sales represented a slight downturn from March, such behavior is not atypical, and the decline reported for April 2021 is much smaller than that observed in prior years.
In April, combined retail sales of adult-use and medical cannabis totaled over $206.3 million, down by 0.4% compared to March’s combined revenues of over $207.1 million. April 2021’s sales are up by 38.9% year-over-year, from over $148.4 million in the same month in 2020. Year-to-date, combined adult-use and medical cannabis sales in Colorado reached over $768 million as of April, up 30.8% compared to the same period last year. Total retail sales expanded by about 26% in Colorado in 2020.
Adult-use retailers in Colorado tallied over $166.5 million in April. Revenues from the state’s adult-use sector in April were down by 0.1% compared to the over $166.7 million in retail sales generated in March, in addition to being up by 48.7% year-over-year. Retail revenues from the adult-use sector expanded by over 24% from 2019 to 2020.
Medical cannabis revenues in April came to over $39.8 million, down by 1.4% from the over $40.3 million in sales tallied in March in that section of the market, and up by 9.1% year-over-year. Retail sales in Colorado’s medical market in 2020 climbed by 30.8% from 2019 but seem to be stabilizing.
In the wholesale realm, tax collection data for May 2021 – which corresponds generally to wholesale transfers and transactions executed in April – shows that the 15% excise tax on wholesale activity in Colorado’s adult-use system resulted in over $9.9 million accruing to state coffers. May’s wholesale excise tax receipts are down by 18.8% compared to tax collections from the previous month, which amounted to over $12.2 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 declined from March to April. (Since August 2017, AMRs are adjusted quarterly by the Colorado Department of Revenue.) The effective tax on internal transfers of flower from licensed cultivation businesses to commonly-owned retailers fell by 24% beginning in April; other product categories saw smaller proportional declines, while a couple saw increases. This suggests that the downturn in tax collections from the wholesale side of the adult-use market is due at least in part to falling tax rates that become effective in April.
Falling wholesale flower prices may also have contributed to lower tax collections, as bilateral deals in the adult-use market are taxed based on the transaction price. Colorado’s Spot Index for April was down by 5.7% compared to March’s average price per pound.