The Colorado Department of Revenue (CDOR) recently released its monthly Marijuana Sales Report for November 2018. Total retail sales decreased for the third consecutive month, following trends observed the year prior, with revenues from the adult-use sector falling to their lowest point since May 2018. Meanwhile, tax collections suggest that wholesale trading and transfers increased overall in November, possibly due to retailers stocking up for the Thanksgiving holiday. Colorado’s Spot Index declined overall in November compared to the month prior but did ascend in each of the final three weeks of the month.
In November, combined retail sales of adult-use and medical cannabis totaled over $123.9 million, down by 4.1% compared to October’s combined revenues of $129.2 million. Total retail revenues have now declined by at least 4% in three consecutive months since reaching a record high for the state in August, of over $141.3 million. In 2017, total monthly sales in Colorado’s market also saw a downturn from October to November, of 6.4%.
Adult-use retailers in Colorado tallied over $97.8 million in November. Revenues from the state’s adult-use sector in November were down by 3.6% compared to the $101.3 million in retail sales generated in October. November is the first month since May 2018 to see retail revenues in the state’s adult-use market total less than $100 million.
Medical cannabis revenues in November came to over $26 million, down by 6.8%, from the over $27.9 million in sales tallied in October in that section of the market. The revenue generated by Colorado’s medical dispensaries in November is the lowest monthly total recorded since the opening of the state’s adult-use market five years ago, falling below the previous trough of over $26.2 million, which occurred in May 2018.
Colorado’s combined retail cannabis sales for November are up compared to the same month last year, by 3.7%, when over $119.5 million in total retail revenues were recorded. Through November, total sales year-to-date have reached over $1.41 billion, up by about 2.3% compared to combined revenues of almost $1.38 billion generated to the same point in 2017.
Retail sales in the adult-use market from January through November 2018 reached over $1.1 billion, exceeding 2017’s full-year total of over $1.09 billion. Revenue generated by adult-use retailers through November 2018 remained up year-over-year, by 11.4%, compared to that documented in the same span the year prior. Meanwhile, retail sales of medical cannabis from January through November 2018 totaled over $302.9 million, down by 21.2% from the revenue reported in the same period in 2017.
In the wholesale realm, tax collection data for December – which corresponds generally to wholesale transfers and transactions executed in November – shows that the 15% excise tax on wholesale activity in Colorado’s adult-use system resulted in over $4.69 million accruing to state coffers. December’s wholesale excise tax receipts are up by 1.3% compared to tax collections from the previous month, which amounted to over $4.63 million.
Average Market Rates (AMRs) used by the state to assess the wholesale excise tax on internal transfers between commonly-owned licenses remained constant from October to November. (Since August 2017, AMRs are adjusted quarterly by the Colorado Department of Revenue. The methodology employed by the Department to assess the state’s AMR for flower and other plant material is different from that of Cannabis Benchmarks in determining the state’s Spot Index and other wholesale price assessments.) Consequently, it appears that the small increase in tax revenues is likely due to an increase in wholesale trading volume in November.
Retailers and dispensaries may have been taking in extra inventory ahead of the Thanksgiving holiday, which has become an occasion for sales and promotions in the cannabis industry, particularly in states with adult-use markets. However, while there may have been more traffic than usual at retailers on “Green Friday” – the industry’s version of Black Friday – the boost in revenues from a strong single day of sales was not enough to lift statewide totals. Similar trends have been observed regarding 4/20 in recent years.