The Colorado Department of Revenue (CDOR) recently released its monthly Marijuana Sales Report for August 2018. Overall retail sales and those in the adult-use sector specifically both reached historic heights for the state’s legal cannabis system. Tax receipts also suggest an increase in wholesale trading and transfers compared to the month prior.
In August, combined retail sales of adult-use and medical cannabis totaled over $141.3 million. That figure represents a record for Colorado’s legal cannabis market, exceeding the prior monthly high sales total of $138.5 million, documented in July. August’s combined revenues were up by 2% month-over-month. In 2017, total monthly sales in Colorado’s market also saw an increase from July to August, of 1.6%.
Adult-use retailers in Colorado tallied just under $113 million in retail sales in August – also a record amount for the recreational sector – and up by 1.5% compared to the over $111.3 million worth of product sold to general consumers in July, which was the previous historic high for the adult-use market in Colorado.
Medical cannabis revenues in August came to over $28.3 million, up by 4% compared to the $27.2 million in sales tallied in July in that section of the market. Retail revenues of medical cannabis in August represent the highest monthly total recorded in that sector of the market in Colorado since March of this year. Monthly medical cannabis sales have not topped $30 million in any month so far in 2018, despite doing so in every month of 2017.
Colorado’s combined retail cannabis sales for August are up compared to the same month last year, by 2.1%. As we have pointed out since the second half of last year, year-over-year growth of sales revenue in Colorado has slowed. For example, August 2017’s monthly sales were up by 10.7% compared to those of the same month in 2016, which were themselves up by 27% compared to those documented for August 2015. Through the first eight months of 2018, total sales year-to-date in Colorado’s legal cannabis systems have reached over $1.02 billion, up by 2.6% compared to the over $996.3 million recorded to the same point in 2017.
In the wholesale realm, tax collection in September – which corresponds generally to wholesale transfers and transactions executed in August – shows that the 15% excise tax on wholesale activity in Colorado’s adult-use system resulted in over $5.1 million accruing to state coffers. September’s wholesale excise tax receipts are up by about 16% compared to tax collections from the previous month, which were themselves down by roughly 15% compared to those of July.
The steep drop in tax receipts from wholesale transfers and transactions made by adult-use cultivators is likely due in large part to a sizeable decline in the Average Market Rates (AMRs) used by the state to assess the wholesale excise tax on internal transfers between commonly-owned licenses that took place in July.
However, as AMRs remained the same from July to August, the bump in tax revenue represents an increase in wholesale trading between unaffiliated operations, transfers between commonly-owned cultivation facilities and retailers, or both. Overall, receipts from the state’s levies indicate that wholesale demand in Colorado’s adult-use cannabis market increased notably from July to August.