The California Governor’s Office of Business and Economic Development (GO-Biz) announced a new batch of cannabis tax revenue community investments on May 31. This round’s grants for fiscal year 2023-2024, which was given to recipients from the California Community Reinvestment Grants program (CalCRG), includes 30 organizations and a total of $46.6 million.

In order to be chosen to receive funds through the CalCRG program, applicants must meet a variety of criteria. Organization must be organized and in good standing six months before being chosen, must maintain their tax-exempt status with the IRS and California Franchise Tax Board, must be an active registered organization through the California Secretary of State’s Office, and have a physical address in California, among other requirements.

The most recent round of applicants includes two organizations located in Alameda County, two in Contra Costa county, two in Fresno County, one in Humboldt County, nine in Los Angeles County, two in Sacramento County, one in San Diego County, three in the city and county of San Francisco, and two in Santa Cruz County. Additionally, six applicants hold established residence in more than one county.

Among the recipients with the highest amount of funds granted, four received $3 million, including Poverello House in Fresno County, Downtown Women’s Health Center in Los  Angeles County, and Get Lit-Words Ignite, Inc. in Los Angeles County, and PRC in City/County of San Francisco. The lowest granted amount included was Monument Impact in Contra Costa County, which received $600,000.

The program first began accepting applications from organizations in 2018. In April 2020 for FY 2019-2020, GO-Biz awarded $30 million in cannabis tax revenue toward 54 organizations. The following year, FY 2020-2021 awarded 59 organizations which received a portion of $15 million. For FY 2021-2022, 78 organizations received a split amount of $35.5 million. Last year for FY 2022-2023, GO-Biz awarded $50 million to 31 organizations. And then of course, the most recent round for FY 2023-2024 saw $46.6 million given to 30 organizations.

In reviewing the past few years of grant results, the amount of cannabis tax revenue funds has generally increased (the highest being funds granted in FY 2022-2023), although the number of organizations chosen has decreased.

This upcoming August, GO-Biz also confirmed that it would reopen its window for applicants to apply for funds once again, which will be reviewed and likely awarded sometime in spring 2025.

In a recent breakdown of cannabis tax revenue in each U.S. state, Marijuana Policy Project shows that California generated a total of $5.7 billion since legalization began in 2018 through 2023. In the beginning, the state collected $397 million, followed by $638 million in 2019, $1.11 billion in 2020, $1.4 billion in 2021, $1.1 billion in 2022, and $1.1 billion in 2023. This is based on a tax rate of 15% excise tax and standard 7.25% sales tax.

California collected the most cannabis tax revenue, followed by Illinois which generated $1.9 billion between 2020- partial 2024 data. Between 2014-2023, Washington state has collected $4.1 billion in cannabis tax revenue, and between December 2019-partial 2024 data, Michigan has collected $1.2 billion.

The GO-Biz annual cannabis tax revenue grant isn’t the only state effort to allow cannabis tax revenue to go back into the community. It also recently awarded $12 million to “to advance economic justice for populations and communities impacted by cannabis prohibition and the War on Drugs by providing support to local jurisdictions as they promote equity in California and eliminate barriers to enter the newly regulated cannabis industry for equity program applicants and licensees,” the grant description stated.

The funds were split among 10 cities and/or counties for FY 2023-2024. This included the city of Oakland ($3 million), city/county of San Francisco ($2 million), Trinity County ($1.8 million), Mendocino County ($1.8 million), city of Sacramento ($1.2 million), city of San Jose ($1 million), Humboldt County ($600,000), city of Coachella ($350,000), city of Daly City ($75,000), and city of Santa Monica ($40,000).

In March, the San Jose City Council published a press release stating that the funds would help the city develop its local cannabis industry. “We are thrilled to support the City of San José’s efforts to reduce barriers to entry into the legal, regulated cannabis industry,” said GO-Biz Deputy Director of Community and Local Equity Grants, Will Koch. “We look forward to this grant providing the technical assistance and funding to support equity in licensing and cannabis business registrations.”

Director of the Office of Economic Development and Cultural Affairs, Nanci Klein, explained the necessity of the program. “San José’s Office of Economic Development and Cultural Affairs is committed to driving a competitive economy that increases the prosperity and quality of life for all our residents and business owners,” Klein said. “The Cannabis Equity Business Academy seeks to equalize the playing field in this complex and heavily regulated business sector, and I am glad to say that of the 29 San José residents participating in the Academy, 86% of them identify as Asian, African and Native American, Latino or Pacific Islander.”

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Revenue generated by adult-use cannabis markets in the U.S. is showing its true impact on the economy. According to a report  by the Marijuana Policy Project (MPP) adult-use cannabis markets generated over $20 billion in tax revenue since launching in Colorado and Washington a decade ago.

In November 2012, Colorado legalized marijuana for adults over age 21 by passing Amendment 64 to the Colorado Constitution. Washington state followed suit with a ballot initiative during the same month.

Legal markets launched shortly after, and data on states that have implemented adult-use cannabis markets has been monitored by the MPP since 2014.

“Legalizing cannabis for adults has been a wise investment,” the report reads. “Since 2014 when sales began in Colorado and Washington, legalization policies have provided states a new revenue stream to bolster budgets and fund important services and programs. Through the first quarter of 2024, states have reported a combined total of more than $20 billion in tax revenue from legal, adult-use cannabis sales. In 2023 alone, legalization states generated more than $4 billion in cannabis tax revenue from adult-use sales, which is the most revenue generated by cannabis sales in a single year. In addition to revenue generated for statewide budgets, cities, and towns have also generated hundreds of thousands of dollars in new revenue from local adult-use cannabis taxes.”

The report goes through tax revenue collected in each individual state, noting the state markets that are not yet operational. Washington’s tax rate was among the highest in the nation, at a whopping 37% at retail with a 6.5% sales tax.

“Twenty-four states have legalized cannabis possession for adults 21 and older. All but one of them—Virginia—have also legalized, regulated, and taxed cannabis sales. In two legalization states—Delaware and Ohio—sales have not begun yet.”

The economic benefits that come from legalizing adult-use cannabis should be one of the movement’s greatest selling points, the report mentions.

“It is important to note that the financial impact of legalizing and regulating cannabis for adult use is one of the many benefits of legalization,” the report concludes. “Adult-use cannabis legalization has also displaced the criminal market and freed up law enforcement resources to focus on serious crime. In legalization states, authorities actually know who is selling cannabis, where it is being sold, when, and to whom, because cannabis is produced and sold by legitimate, tax-paying businesses instead of drug cartels and criminals. Hundreds of thousands of individuals have been spared traumatic arrests, possible incarceration, and criminal records that shut the door of opportunity. Meanwhile, teenagers’ cannabis use rates haven’t increased, and voter support has grown.”

The full report, “Cannabis Tax Revenue in States that Regulate Cannabis for Adult Use,” is available from MPP. 

Aligning with Federal Data

The data appears to align with tax revenue numbers released by the federal government, released in October 2023. The combined totals reveal that states with reported cannabis excise sales tax numbers totaled out to $5.7 billion since Q3 of 2021.

A report published by the U.S. Census Bureau recently shows the progress of cannabis tax revenue numbers for each state. It’s the first report of its kind from the bureau and begins with the Q3 2021.

“The Quarterly Summary of State and Local Government Tax Revenue provides quarterly estimates of state and local government tax revenue at a national level, as well as detailed tax revenue data for individual states,” the report explains. “The information contained in this survey is the most current information available on a nationwide basis for government tax collections.”

It aligns with predictions the MPP released last year, according to a report on May 1, 2023 with data regarding cannabis tax revenue generated by states with legalization. Between 2014 and the end of 2022, the report shows that states had collected over $15.1 billion in tax revenue.

Tax revenue from 2022 alone showed more than $3.77 billion collected, which was actually the first year that total state cannabis tax revenues decreased in comparison to 2021 with $3.86 billion. Even with seeing mature cannabis states collecting a decreased amount in cannabis tax revenue and newer states collecting an increased amount, MPP notes that the numbers are influenced by sales comparisons from the pandemic.

The 2023 report also includes a year-by-year total of collected tax revenue as well. In 2014, tax revenue reached $68,503,980 and 2018 was the first year that cannabis tax revenue passed the million mark at $1,308,693,928. 

MPP’s reports show the true potential that adult-use cannabis can bring, in the form of tax revenue.

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Green isn’t just the color of cannabis, but cash, too. And thanks to your valiant efforts of consumption, the industry is looking to help out the economy. Info from the newly released MJBiz Factbook reveals that the economic impact of regulated marijuana sales in the U.S. could exceed a whopping $112.4 billion in 2024. That’s a 12% growth compared to last year. 

Overall, the Congressional Budget Office forecasts a slowdown in economic growth for 2024 due to higher unemployment levels and reduced inflation. As a result, the Federal Reserve is likely to lower interest rates starting in mid-2024. After this, economic growth is expected to rebound in 2025 (mark the year in your calendars hopefully you’ll have extra money for weed) and then level off in the following years. So, while 2024 isn’t likely going to be one of the best economic years on record, that’s not the cannabis industry’s fault. Without it, we’d be $112.4 billion poorer as a nation. And as new cannabis markets emerge, the industry is projected to contribute over $200 billion in additional spending to the U.S. economy by 2030.

While there were sales dips in established western markets (licensed retailers in California reported taxable sales exceeding $5.1 billion in 2023), marking a 4.7% decline from the previous year, according to the latest year-end data from the California Department of Tax and Fee Administration, you may have read about the California mass extinction), the cannabis industry continues to see growth through the expansion of new recreational and medical marijuana facilities in states like Maryland, Missouri, and New York. 

While it’s exciting to see that the cannabis industry is going to add hundreds of billions of dollars to the economy, keep in mind that MJBiz’s date doesn’t account for potential U.S. government actions like federal rescheduling or legalization, each of which could boost revenue and economic impact. While Biden has said he’d reschedule cannabis and expunge more cannabis convictions, he hasn’t turned out to be the great liberal hero who legalizes marijuana for all. Donald Trump has been all over the place when it comes to cannabis. Thirty years ago, he said drugs should be legal, but he has backpedaled in modern years to appeal to his conservative voter base. Twenty-five years later, at the Conservative Political Action Conference, he said that he thinks marijuana legalization is “bad” and that he feels “strongly about that.”

To come to the figure of $112.4 billion of economic impact, MJBizDaily applied some epic math by looking at comparable industries. Then, they used a standard multiplier to estimate projected sales for recreational and medical marijuana. The economic multiplier illustrates the broader economic impact of the cannabis industry. It suggests that for every dollar spent by consumers and patients at adult-use stores and medical marijuana dispensaries, an additional $2.50 is circulated into the economy. This money primarily benefits the local economies that sell the cannabis in the first place. 

Keep in mind that the economic impact of the marijuana industry is different from supply-chain revenue, which is commonly utilized to gauge an industry’s ‘total size.’ According to the MJBiz Factbook, total U.S. sales for adult-use and medical cannabis are projected to hit $32.1 billion in 2024 and rise to $58 billion by 2030. 

The term “economic impact” describes the effect of an industry (or an event) on the economy of the corresponding region or country. This includes economic growth, employment, wages, and overall economic activity changes. The economic impact includes direct impacts, such as the immediate benefits from business spending and salaries; indirect impacts, such as additional economic activity from local suppliers fulfilling new demands; and induced impacts, which happen from employees spending their paychecks locally. Knowing the economic impact helps stakeholders understand the economic value of different industries and make corresponding decisions. 

The projections represent the best estimates available for the ever-evolving marijuana industry, which is different from others as it operates under a complicated and ever-changing set of state regulations yet is still illegal federally (until, of course, we elect someone down to make some real progress). The cannabis industry is vast and includes agricultural, manufacturing, and retail sectors, as well as businesses that don’t sell weed but help the cause, like lighting suppliers and cannabis-friendly accounting firms. The number even includes 420-friendly events and hospitality businesses, which can really improve our economy, per the data, and make you feel good about taking part in your local cannabis community. 

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Farmers in Zimbabwe are pivoting from the country’s traditional staple crops like corn to a new lucrative crop—hemp production. Leaders in the country, however, are more worried about any disruptions to food security locally than the potential economic boon hemp will likely bring to the country.

Agriculture contributes about 18% to Zimbabwe’s total gross domestic product (GDP), and maize or corn is the country’s staple crop and accounts for a substantial proportion of the lion’s share of fertilizers that are used, the Zimbabwe Food and Agriculture Organization reports. Corn crops are followed by millet and sorghum, in terms of prevalence.

The country also adopted a unique hemp program compared to other countries. In February 2023, Zimbabwe increased the THC limit for industrial hemp from 0.3% to 1%, making significant changes for the African country’s hemp industry. That changes everything, as even 1% THC is enough to allow for products with low psychoactive effects. International companies have taken note and are utilizing growth through Zimbabwean hemp.

The rapid changes in Zimbabwe’s economy is promising but it also creates a few new concerns. ZimEye reports that the country’s hemp industry is governed by the country’s Agricultural Marketing Authority (AMA), and the shift into hemp production signals a new era for Zimbabwe’s economy, which has historically been rooted in food production. 

However, this pivot towards industrial hemp cultivation raised concerns over the potential negative impacts on the nation’s food security, challenging Zimbabwe’s agricultural legacy: The 1975 UN World Book records highlighted Zimbabwe—then called Rhodesia—as having the fastest-growing crop economy.

International interest in Zimbabwean hemp is increasing. Zimbabwe has exported over 8,000 tons of hemp to countries such as Poland, Switzerland, and Germany. Plantiqua Hemp, a Poland-based company, for instance, to enhance the quality and marketability of Zimbabwean hemp.

This makes AMA agribusiness director Jonathan Mukuruba optimistic about this new sector that’s growing in strength. “The future of industrial hemp in Zimbabwe looks very promising… with a growing interest in the sector, Zimbabwe is on track to emerge as a regional leader in industrial hemp production,” Mukuruba said.

Zimbabwe’s poverty rate hit nearly 40% in 2019, which is why food security is crucial in any decision for local leaders. “Poverty” is defined in the country as people who make less than $2.15 per day.

 “The challenge lies in balancing the cultivation of crops for industrial purposes with the imperative to ensure food security,” stated Dr. Frank Magama, CEO of Kutsaga Research Station. “As we explore the potential of hemp, we must also consider our longstanding tradition of food production and the critical importance of maintaining food security.”

Kutsaga Research Station is conducting research to identify hemp varieties suitable for Zimbabwe. 

Zimbabwe’s Shifting Economy and Hemp

That’s changing quickly in the African country as nearly all forms of cannabis were illegal prior to changes made in 2018. 

In 2018, Zimbabwe became the second nation in Africa to legalize medical cannabis and cannabis production for medical and scientific purposes. Since then, Zimbabwe officials registered over sixty entities in the hemp production, trade, and research sectors since the market took off in 2018.  In 2019, Zimbabwe abolished its ban on cannabis cultivation, which set the stage for the country’s farmers to begin cultivating industrial hemp to export. That same year, the country issued the first license to a medical cannabis company to begin cultivation.

In May 2022, Zimbabwean President Emmerson Mnangagwa commissioned a $27 million medical cannabis farm and processing plant to be run by Swiss Bioceuticals Limited in West Province, Zimbabwe.

The Medicines Control Authority of Zimbabwe said on July 26, 2022 that it would begin accepting applicants from cannabis and hemp producers, manufacturers, importers, exporters, and retail pharmacists, in a seismic shift away from tobacco.

Higher THC caps make the country’s hemp unique.

Zimbabwe Independent reported that the THC level increase makes significant changes for CBD manufacturers, who will now be able to produce the entourage effect combined with other cannabinoids. 

The amended bill, called the Criminal Law (Codification and Reform) Amendment Bill, 2002 is proposing the amendment of section 155 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] (hereinafter referred to as “the Act”) to remove industrial hemp from the list of dangerous drugs.

“By the insertion of the following definition,” the bill reads, “‘Industrial hemp’ means the plant cannabis sativa L and any part of that plant, including the seed thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers, whether growing or not with a delta-9-tetrahydrocannabinol concentration of not more than one per centum on a dry weight basis.”

With looser restrictions on hemp farming, the plant could replace maize or corn eventually as the country’s next staple crop.

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Oregon cannabis producers grew too much weed again this year, according to a new report, continuing the glut of marijuana that has plagued the state’s regulated pot industry for years. 

For much of this year, analysis of Oregon’s production of cannabis showed that the state was on a downward trend compared to last year, leading to a modest increase in prices. But a new report from state economists Mark McMullen and Josh Lehner that was released on November 20 shows that this year’s fall harvest of outdoor weed pushed this year’s total crop beyond production levels posted in 2022.

“Through the first nine months of the year, the marijuana harvest was nine percent lower than a year ago, and 15 percent lower than the record crop back in 2021,” the economists wrote. “As the market appeared to be adjusting, prices were stabilizing. That changed with the large October outdoor harvest which is 15 percent larger than last October.”

Oregon’s cannabis cultivators have been growing more weed than the state’s consumers can smoke for at least five years. Mark Pettinger, a spokesman for the Oregon Liquor and Cannabis Commission (OLCC), said last year that the problem is caused in part by the difficulty operators and regulators have in predicting weed production. Because much of the state’s weed is harvested at the same time, the industry can be slow to adjust to changing market conditions at the wholesale and retail level.

“It’s because about 85% of the crop is grown outdoors, comes down in October during harvest time, but planting planning is made the following April — which there really hasn’t been enough time to really gauge how the harvest from the previous fall is impacting the market,” Pettinger told a local television news outlet in 2022.

Weed Oversupply Challenges Industry

The glut of weed in Oregon’s regulated market has wreaked havoc on the industry for years. Because of the oversupply, prices on wholesale cannabis and retail products have plummeted. While the decline in prices is welcomed by most consumers, cannabis companies have been left with dwindling margins and falling, or nonexistent, profits. As a result, producers, wholesalers and retailers throughout the state are having a difficult time making ends meet.

Beau Whitney, a Portland-based economist who monitors cannabis prices in Oregon and throughout the United States, said that more than one-third of respondents to a cannabis industry survey said that they are having difficulty paying their taxes. Even more said that managing debt is a problem. 

Whitney said that the latest report of Oregon’s abundant fall harvest “couldn’t have come at a worse time.”

“People are walking away from cannabis licenses or selling them for pennies on the dollar,” Whitney told Willamette Week.

The slump in cannabis prices has also been reflected in the collection of Oregon’s weed taxes. Throughout the state, tax delinquencies are up and cannabis tax revenue has fallen short of estimates for four of the past five quarters.

Whitney noted that Oregon regulators could spur an increase in cannabis prices with a curb in production, which could be accomplished by limiting the number of licenses or their capacity. But Pettinger of the OLCC said that the current oversupply conditions are the result of intentional policy decisions coupled with the federal government’s continued refusal to legalize cannabis, which would open up markets across the country for Oregon’s weed growers.

“The state and the industry and elected officials envisioned Oregon becoming a net exporter under federal legalization,” Pettinger says. “The oversupply we’re seeing underscores the dilemma in all states where marijuana is legal—it’s the equivalent of an Iowa corn farmer only being able to sell his crop within Iowa.”

Falling Prices Lead Trade Groups To Merge

Falling weed prices and the resulting instability of Oregon’s cannabis industry led two industry groups to join forces in a recent merger. The two groups, the Oregon Cannabis Association and the Cannabis Industry Alliance of Oregon, announced the merger last month following unanimous votes by the boards of directors of each organization. 

“There’s a lot of knowledge, there’s a lot of passion, there’s a lot of really educated folks within the cannabis industry in Oregon,” said Hunter Neubauer, board member of the combined trade group. “Those folks need one place to go to, where they can take a little bit of money that they have, and hopefully become members, and show up with us in Salem and advocate for reasonable regulations and future opportunities for the industry.”

The newly merged group is named the Cannabis Industry Alliance of Oregon and represents more than 500 member businesses in the state’s licensed cannabis market, which generates about $1 billion in sales annually.

“It’s a community that we all really value and we want to see survive and thrive,” Mike Getlin, the board chair of the Cannabis Industry Alliance of Oregon, told local media. “We want something more than a bunch of minimum wage jobs owned by out-of-state and potentially even overseas financial interests. So that’s what this fight is really about for us.”

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A cost-benefit analysis of the impact of a proposed cannabis legalization measure in Ohio has determined that legalization would generate a net economic benefit of $260 million per year. Ohio voters go to the polls next week to decide on Issue 2, which would legalize marijuana for adults 21 and over and set the stage for a regulated cannabis industry.

In a study released last week, Columbus-based Scioto Analysis attempted to quantify the net economic impact of Issue 2 if it prevails at the polls. To complete the analysis, researchers used studies from Colorado and Washington, two states with mature regulated cannabis markets, in conjunction with economic and census data and crime statistics to estimate the costs and benefits of legalization. Taken together, the data showed an estimated net economic benefit of $260 million per year.

One of the biggest economic impacts would come from the approximately $190 million in additional tax revenue the state would receive from cannabis taxes. The study notes that this figure, however, does not represent the total social benefits recognized from legalization.

“Tax revenue on its own is not a social benefit, but rather a transfer from taxpayers to the public sector that is then used to pay for goods and services purchased by the government,” it says. “Thus, benefits are only generated when goods and services purchased by governments have positive spillovers.”

Researchers explained that the economic benefit is even greater than the taxes raised, however, because of the way the money is spent. Of the tax revenue raised by Issue 2, 36% is directed to the Cannabis Social Equity and Jobs Fund and 25% is reserved for the Substance Abuse Addiction Fund. Using data from other states with similar funds, the report estimated that the Ohio equity and jobs fund would create $5.76 in benefits for every dollar spent and the substance abuse fund would create $9.19 per dollar.

“The key reason benefits are likely to outweigh costs when it comes to marijuana legalization is how the tax dollars raised are going to be used,” policy analyst Michael Hartnett, said about the study. “The programs outlined in the ballot initiative have historically been very efficient ways to use public dollars, and will likely generate a lot of value for Ohioans.”

Legalization Would Create Thousands of Jobs

The analysis also factored in the new jobs that would be created by the regulated cannabis industry once legalization takes effect.

“Our models predict that Ohio will add roughly 3,300 new jobs in the first year after legalization,” the report notes, as cited by the Ohio Capital Journal. “Assuming these jobs are full time and pay matches the average wage across the state of Ohio, this will amount to about $190 million in wage benefits for workers across the state. Since these jobs are likely to include part-time work and may be lower than the average wage across the state, this may represent an upper bound on the value of employment generated by legalization.”

The state would also have the added economic benefit of fewer arrests for cannabis-related offenses and the resulting court and incarceration costs needed with prohibition.

“One study on arrest rates in Washington found that marijuana arrests fell by 87% for adults aged 21+ and by 46% for adults aged 18-21 after legalization of the sale and purchase of cannabis for recreational purposes,” the study said. “This confirms that for the population that would be allowed to legally use cannabis recreationally, arrests almost completely disappear, but the effect is smaller for the population where it would still be illegal to use cannabis.”

“Using data from the FBI’s Uniform Crime Report on the number of cannabis-related arrests in Ohio, we estimate that there would be about 4,400 fewer arrests per year if recreational cannabis were legalized,” the study continued. “Adding up the cost of those arrests, and assuming that 6% of those people would have been convicted of felonies, this amounts to over $38 million in savings for Ohio.”

The study subtracted the negative economic impacts of legalization to arrive at its estimate of net benefits. One of the greatest costs incurred is a loss of productivity in some industries that was documented in other states after legalization.

“One study from 2017 found that across four industries (mining; construction; arts, entertainment, and recreation; and accommodations and food Service) average productivity per worker fell by just over 1% in states that legalized recreational cannabis,” the report said. “Monetized, this equates to roughly $900 of lost productivity per worker for Ohio.”

Using federal employment data, the report said, “we estimate that legalizing recreational cannabis will cost workers across the state about $760 million in lost productivity in the first year of legalization.”

The study also identified negative implications on public safety caused by legalization including an increase in arrests for intoxicated driving. The study estimated that legalization would lead to an additional 1,700 intoxicated-driving arrests each year in Ohio, costing about $130 million.

But overall, the report estimated that legalization would result in a $260 million net benefit for the state.

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The Colorado Department of Revenue (DOR) released a monthly cannabis sales report for August, the latest month available, showing that adult-use and medical cannabis sales surpassed $15 billion.

While the overall picture looks good, sales are actually down during the past few years since peaking during the pandemic, and the downward trend worries some analysts.

The data shows Colorado adult-use and medical cannabis sales reached a total of $15,028,995,376. Since 2016, the state has sold $1-2 billion in cannabis each year. But because of oversupply issues ultimately leading to lower prices, Colorado sales are expected to be lower in 2023 than prior years.

The DOR’s Marijuana Sales Reports summarize total sales made by medical and retail cannabis stores monthly by county. The Marijuana Sales Report has monthly total sales for the state, and the Marijuana Sales by County Report shows monthly sales by medical and adult-use cannabis stores by county.

Adult-use cannabis sales launched in Colorado in January 2014. 

Sales are still up compared to when the market launched in 2014, but has fallen precipitously since its peak during the pandemic.

The Colorado cannabis market sold almost $2.2 billion in 2020 and more than $2.2 billion in 2021, as many residents  were forced to quarantine at home, and government stimulus checks provided people with some extra cash.

That’s because the state’s dispensaries are struggling amid an economic downturn.

Sales of both medical and adult-use cannabis in Colorado plummeted in June 2022—marking a downward trend that extends to today.

Unless cannabis sales pick up in Q3 of 2023, full-year cannabis sales could be down from 2022, when Colorado cannabis companies sold $1.7 billion in cannabis, matching sales in 2019. As of the end of August, year-to-date sales tallied in at just over $1 billion.

Cannabis Sales in Denver, the State’s Largest Market

In Colorado’s largest city and capital, and the corresponding county, the drop in sales is acute. A July report from the City and County of Denver shows a 22% decline in annual cannabis sales revenue from 2021 to 2022, the largest annual drop since legalization launched.

Consumers who are strapped for cash are buying fewer expensive products, Truman Bradley with the Marijuana Industry Group told 9 News.

“The ripple effect to employees and customers can’t be overstated either,” he said. “As cannabis sales drop, so do the tax revenues.” 

Denver makes up about a third of the state’s entire cannabis sales.

“In 2021, 31% of Colorado’s total marijuana sales occurred in the City and County of Denver,” a Municipal Marijuana Management report from 2022 reads. “From 2014 to 2021, the proportion of marijuana sales in Denver out of all Colorado marijuana sales has fallen by 17%, going from 48% to 31%. This downward trend, which has been consistent since the implementation of retail marijuana sales in 2014, indicates marijuana sales growth outside of the City and County of Denver has been increasing faster than within the city.”

A recent report from The Denver Post analyzes the fallout of the post-pandemic cannabis industry in Colorado.  “The market’s just bad. It’s bad right now,” cannabis salesperson Val Tonazzi told The Denver Post. “There’s businesses closing, left and right.”

Federal Law Impacts Sales in Colorado

Colorado Gov. Jared Polis recently sent a letter to President Joe Biden on Sept. 5 regarding the U.S. Department of Health and Human Services’ (HHS) recommendation for the Drug Enforcement Administration (DEA) to reschedule cannabis from a Schedule I substance to a Schedule III substance.

 “We are pleased to hear that you have recently received Health and Human Services’s (HHS) recommendation to move cannabis to Schedule III,” Polis began in his letter. “It’s about time.”

“This is an historic moment and we owe you and your administration a debt of gratitude for your leadership on catching up with where the science is,” Polis continued.

 “Cannabis’ current classification under federal law as a Schedule I drug is contradicted by the scientific evidence. The notion, as previously considered, that cannabis has no accepted medical use, a high potential for abuse, and no accepted safety standards even under medical supervision has been widely disproven, HHS’s recommendation is evidence-based and a move in the right direction.”

Polis also addresses the issues that still need to be resolved, such as banking. He wrote that if cannabis becomes a Schedule III substance, banks would be free to serve cannabis businesses and that tax code 280E would no longer be necessary.

Oversupply, lack of demand, competition with neighboring legal states, and black market sales, puts Colorado cannabis businesses in a bind. 

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A report published by the U.S. Census Bureau recently shows the progress of cannabis tax revenue numbers for each state. It’s the first report of its kind from the bureau and begins with the Q3 2021.

“The Quarterly Summary of State and Local Government Tax Revenue provides quarterly estimates of state and local government tax revenue at a national level, as well as detailed tax revenue data for individual states,” the report explains. “The information contained in this survey is the most current information available on a nationwide basis for government tax collections.”

The agency refers to this data as “an experimental product,” but showcases excise taxes collected since Q3 2021. Washington and Colorado, the first two states to legalize cannabis, led with the most in collected excise sales taxes with $818.5 million and $648.1 million. Data for Oregon however, another early adopter of legalization, only collected a total of $364.6 million during the same time frame. On the other hand, California’s total reached $1.4 billion during the same period, and Illinois collected $491 million. Newer markets such as New York collected just $27.9 million, and Vermont, which only reported tax data for Q4 2022, Q1 2023, and Q2 2023, showed a total of $6.7 million.

The report included all 50 states, even those that do not currently have legal cannabis implemented (those were signified as either an “X” for no such tax, or “NA” for data not yet available). However, the listing does include sales tax data from Washington D.C., which revealed a total of $4.4 million.

While the U.S. Census Bureau published a spreadsheet with all of the data, it did not include automatic totals. However, manual addition reveals that states with reported cannabis excise sales tax numbers totaled out to $5.7 billion since Q3 of 2021.

The agency also explained how ongoing data will be reported going forward. “Data for cannabis excise sales taxes reported for a particular quarter generally represent taxes collected on sales made during the prior quarter (i.e. data released in September 2023 will cover sales during the quarter ended June 30, 2023),” she said.

Many states reported record-breaking numbers for monthly sales revenue, which also won’t be showing on the U.S. Census Bureau reports yet. 

Illinois had numerous months showing increases in cannabis sales revenue ($451.9 million in FY23) and passing the state’s alcohol sales revenue ($316.3 million in FY23). Michigan recently hit another sales record in August, showing $276 million in July 2023, although the data regarding profits is not as positive. Another record breaker was Massachusetts, which reached sales of $152 million in June for a total of $4.74 billion since 2018.

The bureau originally announced in 2021 that it would begin to collect data on both cannabis taxes, as well as sports betting sales taxes. “Tax collection data are used to measure economic activity for the Nation as a whole, as well as for comparison among the various states. Economists and public policy analysts use the data to assess general economic conditions and state and local government financial activities,” the agency explained, according to an article on the Federal Register. “We plan to add the collection of cannabis and sports betting sales taxes.”

The bureau also announced in August 2023 that it’s working on updating its 2022 Economic Census survey questions with the rapidly growing cannabis industry in mind. “It is important for the Census Bureau to keep up with changes in technology and ask the right questions the right way to capture relevant information,” the U.S. Census Bureau stated. “In preparation for this economic census, the Census Bureau worked extensively with industry experts and researchers to update the survey.

This report shows a genuine interest in uniting cannabis sales and tax data in order to better track the industry’s progress on a nationwide scale.

A recent report from BDSA, a cannabis data analytic company, projects that the global value of the cannabis industry could reach up to $55 billion in 2027. Currently, BDSA shows newer cannabis markets as the driving force for this projection. “New York, Missouri, New Jersey and Maryland are set to experience significant market growth, with New York and New Jersey each projected to be $2.5 billion markets by 2027,” said BDSA co-founder and CEO, Roy Bingham. “While mature markets like California and Colorado continue to face stagnating or declining sales, Michigan has emerged as an outlier and is expected to become a $3.8 billion market by 2027.”

BDSA also forecasts a “return to modest sales growth” in California by 2025, with a rebounding increase in sales to $5.24 billion in 2027. But competitors such as Canada are also expected to grow, with a 9% increase in adult-use sales by the end of this year, for a total of $4.6 billion, but a decrease in sales from medical cannabis by $200 million by 2027.

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Banking institutions are in a race to allow cannabis businesses ahead of imminent changes in the way cannabis is classified at the federal level, according to federal data. Cannabis remains prohibited at the federal level, but the U.S. Health & Human Services Department (HHS) recommendation to reclassify cannabis from a Schedule I to a Schedule III changes everything.

NORML reports that there’s a spike in the number of banking institutions that are filing to work with cannabis businesses as the fear of repercussions subsides. 

According to quarterly data provided by The Financial Crimes Enforcement Network (FinCEN),  a bureau of the United States Department of the Treasury, over 800 banks and credit unions have filed paperwork with the U.S. government acknowledging their relationships with licensed cannabis businesses.

FinCEN reports that 812 banks and credit unions reported that they are actively working with cannabis companies during the second quarter of the FY2023. That’s a record high since FinCEN first started tracking these numbers. It represents a significant rise from last year’s numbers, when they identified 553 banks—only 11 percent of all U.S. banks—and 202 credit unions.

FinCEN “issued guidance to clarify Bank Secrecy Act (BSA) expectations for financial institutions seeking to provide services to marijuana-related businesses (MRBs),” the report, which is available for download, reads. “This FinCEN guidance clarified how financial institutions can provide services to marijuana-related businesses consistent with their BSA obligations, and aligns the information provided by financial institutions in BSA reports with federal and state law enforcement priorities.”

FinCEN Types of Cannabis Businesses

“FinCEN’s 2014 Guidance specifies three phrases for describing a financial institution’s relationship to Marijuana-Related Businesses (MRBs) in SARs: 

• Marijuana Limited:  means the financial institution provides financial services to an MRB that the financial institution reasonably believes, based on its customer due diligence, does not implicate one of the Cole Memo priorities or violate state law.  
• Marijuana Priority:  means the financial institution provides financial services to an MRB that the financial institution reasonably believes, based on its customer due diligence, implicates one of the Cole Memo priorities or violates state law. 
• Marijuana Termination: means the financial institution deems it necessary to terminate a relationship with an MRB in order to maintain an effective anti-money laundering compliance program.”

NORML leaders discussed the topic with The Hill last May.  

“No industry can operate safely, transparently or effectively without access to banks or other financial institutions and it is self-evident that the players in this industry (smaller and minority-owned businesses in particular), and those consumers that are served by it, will remain severely hampered without better access to credit and financing,” NORML Deputy Director Paul Armentano told The Hill.

According to survey data compiled last year by Whitney Economics, over 70% of cannabis businesses that were asked said that the “lack of access to banking or investment capital” is their top challenge. 

FinCEN’s Marijuana Banking Update from March 2022 shows a steady increase in the number of banks and credit unions filing to cater to cannabis businesses. “As of 30 September 2021, FinCEN had received a total of 219,097 SARs using the key phrases associated with MRBs. Several of the SARs contain more than one key phrase, which accounts for the numbers for each key phrase being greater than the total,” the report reads.

“FinCEN received 172,501 SARs from filers using the key phrase ‘Marijuana Limited.’ FinCEN received 15,359 SARS from filers using the key phrase, Marijuana Priority. FinCEN received 42,791 SARs from filers using the key phrase ‘Marijuana Termination’.”

FinCEN began providing guidance to cannabis businesses in 2014 with the goal to to help banking institutions operate while cannabis remains illegal at the federal level.

Why Banks Are Changing Their Tune

Yahoo! News reported earlier this month that HHSrecommendation to reclassify cannabis from a Schedule I to a Schedule III drug could transform the cannabis industry and create new opportunities for banking institutions.

“Rescheduling cannabis to Schedule III may allow dispensaries to accept credit card payments,” Richard Laiderman, former head of global treasury for VISA and Co-Founder and chair of StandardC, said. Credit card payments may supplant cash transactions if this occurs, reducing the risks and costs associated with cash-only operations.”

Cannabis banking expert Robert Baron said, “While changes will inevitably occur, financial institutions looking to serve this market segment must implement risk management tools to evaluate and monitor cannabis businesses. This is where StandardC’s business underwriting & monitoring tools are perfectly suited to meet their Bank Secrecy Act and customer due diligence obligations.”

The HHS recommendation to reclassify cannabis from Schedule I to Schedule III would be a pivotal step—the first of its kind at the federal level—to make the cannabis industry safer for everyone.

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Cannabis businesses in Texas may soon make more money than the wine industry, the Austin Business Journal reports. Cannabis companies brought in over $8 billion in revenue in 2022, according to a new report from Whitney Economics, an Oregon-based cannabis and hemp analytics firm. Even though plenty of people enjoy both wine and weed (sometimes together), the booze hounds and the stoners are always competing against one another, even just for fun. And, at the moment, in Texas, the sommeliers may need to watch their backs. 

However, unfortunately, there is one major setback keeping the stoners from celebrating this win. Recreational cannabis is still illegal in Texas. Possession of up to two ounces is a class B misdemeanor and can get you up to 180 days in prison and a fine of up to $2,000. In November of 2022, the vast majority of voters in Denton, Texas, approved a measure decriminalizing low-level marijuana offenses. However, city leaders defied those results, voting “against adopting the ordinance that would have decriminalized marijuana” by a margin of 4-3, CBS News Texas reported.

The Tex-Mex restaurant E-Bar recently went viral for its anti-stoner policy posted on its window reading: “If You Have The Smell Of Marijuana On You We Will Not Serve You.” 

The Lone Star State allows medical cannabis for conditions such as epilepsy, multiple sclerosis, and terminal cancer. Texas’ Compassionate Use Program confirmed they had nearly 61,000 registered patients in July (up from more than 45,000 in January, according to state data).

However, that doesn’t mean that Texans who use marijuana medically can just get a high-THC edible delivered to really knock out the pain while they kick back to binge-watch a dark comedy. Residents in states like New York and California forget how good they have it. In Texas, medical patients are only granted low-THC oil, with less than 1% THC. This law has been in effect since 2015. CBD is legal, thanks to the passage of the 2018 Farm Bill, and that’s what these analytics looked at. 

“This landmark study affirms the true value the hemp industry provides our state, from creating jobs and supporting livable wages to fostering business expansion and product innovation,” stated Ilissa Nolan in a statement, executive director of the Texas Hemp Coalition, a nonprofit dedicated to hemp advocacy and education, the Austin Business Journal reports. 

Whitney Economics compiled the data using surveys sent to CBD and hemp retailers, manufacturers, distributors, and smoke and vape shops, gas stations—pretty much any type of business that sells CBD was included. But only some of them got to participate. Around 53% of the estimated 5,000 hemp, CBD, and cannabinoid retailers, manufacturers, and distributors in Texas received the survey. So, these findings, while exciting, are limited. 

According to the data, businesses involved in hemp-derived CBD, from the manufacturing to the storefront, employed more than 50,000 Texans, generating between $19.1 billion to $22.4 billion in economic growth. (Revenue, which is income, is different from economic growth, which is an increase in the production of goods and services in an economy, hence the disparity between the earlier cited $8 billion figure). Worker wages in the cannabis space went beyond $1.6 billion. 

Conversely, the wine industry generated more than $20 billion for the Texas economy, according to Wine America, supporting more than 141,000 jobs with nearly $7 billion earned in worker wages. 

Alcohol sale was restricted in Texas leading up to national prohibition, which lasted from January 17, 1920 to December 5, 1933, but business has been booming since then. CBD has only been able to establish itself as a legal business model in the Lone Star state since 2018. Considering cannabis is already catching up to wine, despite the fact that it’s only legal in its mildest form (CBD), this indicates that Texans are voting with their money, and that money says that they want more cannabis. 

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