Colorado after legalization: statistics and what they imply
Seven years ago, Colorado was the first state to legalize recreational marijuana. What were the results of legalization in Colorado? Here's what has happened there since then.
It has been more than seven years since Colorado adopted Amendment 64 to be the first country in the country to legalize recreational marijuana. On election day 2012, 55 percent of Colorado voters supported a measure that would allow marijuana to be used personally and would establish a regulated commercial market.
This legal marijuana market was launched half a decade ago in 2014. Five years later, cannabis continues to thrive in Colorado. There are around 590 licensed marijuana retail stores across the state, and 2019 combined recreational and medical cannabis sales reached a record $ 1.75 billion, up 13 percent year over year.
Colorado's "big experiment" with marijuana drives the national debate about cannabis policy. Legislators, lawyers, law enforcement, entrepreneurs and others are intensely examining the data that shows the impact of legalization. A number of studies, surveys and statistics have been published that provide an overview of the effects since the market launch.
Here we take a look at Colorado for the legalization statistics and examine what they could mean for the future of the cannabis industry in Colorado and the United States.
Marijuana sales and tax revenue
Colorado has benefited financially from six years of legal marijuana sales. Since launch, the state has seen higher than expected marijuana sales and tax revenue.
Total marijuana sales in the state have increased from around $ 683.5 million in 2014 in the first year of the recreational market to over $ 1.75 billion in 2019. Based on sales data from the first three months of 2020, the state is on track to exceed the 2019 total.
When you look at the results of legalization in Colorado, it's impossible to overestimate the impact of total sales. Since its launch in January 2014 through March 2020, Colorado's medical and recreational retail stores have sold more than $ 8.2 billion in cannabis products.
These retail sales of cannabis have generated substantial tax revenue for the state of Colorado. Tax revenue for marijuana has more than tripled in the past six years, from nearly $ 67.6 million in 2014 to over $ 302 million in 2019.
Colorado has three main taxes on cannabis: a 2.9 percent sales tax on medical marijuana, a special 15 percent sales tax on recreational marijuana, and a 15 percent sales tax on retail marijuana.
Medical marijuana sales tax flows entirely into the state marijuana tax fund and is then distributed to a variety of government functions, including education, public health, construction, law enforcement, and drug abuse prevention and services. Some of these funds have helped to open new psychiatric clinics.
The special sales tax is divided between the general fund and a silo for local government.
The first $ 40 million of excise goes to school construction and the rest to public school funds.
So far, Colorado has used its taxpayers' money for recreational purposes wisely. Since 2015, the state has distributed $ 200 million to the Department of Education for building schools alone.
But that's not all. The distributions of marijuana tax revenue to the Colorado Department of Education also included:
$ 14.2 million in competitive grants for early literacy
$ 28.4 million for grants from school doctors
$ 6.9 million in school bullying prevention and educational grants
$ 6.9 million for early school leaving programs
$ 30 million for the state public school fund
Local communities that allow marijuana sales can also levy their own taxes on marijuana.
The city of Denver provided over $ 16 million in education between 2014 and 2019. The money was used to finance eight different programs to distract young people and prevent drugs at 17 different schools. The city invested nearly $ 9 million in marijuana tax money in 2019 to repair aging parks and recreation centers, an estimated $ 11.2 million a year for its affordable housing fund, and over $ 3 million for opioid interventions and resources .
Pueblo County used part of its tax revenue from the sale of adult marijuana to fund college grants for its high school graduates. For the 2017/18 academic year, the county awarded 210 student grants of $ 420,000 and another 350 student grants of $ 700,000 for the 2019-20 academic year.
This tax revenue would not be possible without the establishment of a successful legal Colorado market. Research firm New Frontier Data estimates that more than 80 percent of government cannabis users have switched to buying their products through licensed retailers.
As the marijuana industry in Colorado has grown in the past five years, employment in industry and sub-sectors has also increased.
While accurate statistics on the jobs created by the marijuana industry in Colorado are not available, the Treasury Department provides data on the number of people admitted to work in the sector.
By April 2020, Colorado had issued 40,267 individual licenses in the marijuana industry and 1,686 business owner licenses.
The Marijuana Policy Group estimates that an active license equates to 0.467 full-time positions. This would suggest that the cannabis industry in Colorado employs approximately 19,592 full-time workers.
Colorado may have the largest per capita marijuana labor market in the country, according to Leafly's latest annual cannabis job report. The widely recognized cannabis news and education agency estimates that the Colorado industry has 34,705 cannabis jobs, only behind California.
In addition to direct employment, the marijuana sector has also created jobs in other sectors that support the industry. A 2016 Marijuana Policy Group report estimated that side jobs such as "security, construction, HVAC, consulting, legal, and other business services" accounted for approximately 23 percent of Colorado's direct cannabis industry jobs .
Colorado has been the first U.S. state to launch a legal marijuana market to benefit from an increase in tourism.
According to a report by the state Treasury, tourism has grown 51 percent since 2014. Overnight stays by vacation tourists in Colorado reached a record high of 19.5 million in 2018, an increase of 3 percent compared to the previous year.
More than 6 percent of Colorado travelers this year said that access to legal marijuana was one of the main reasons for their visit. 16 percent of travelers in winter 2018-2019 and 15 percent of travelers in summer 2018 said they visited a marijuana retail store while in the state.
Some also believe that legalizing marijuana has led to a growing homeless population in the state. Rather than associating cannabis use with homelessness, the thought is that legal marijuana has attracted some who are already homeless because they sought legal access to cannabis. A 2018 survey of seven Colorado city and district prisons found that a third of homeless inmates said they had come to Colorado after 2012, at least in part, for legal marijuana.
Governor of Colorado, John Hickenlooper, downplayed the results of the survey, noting that participants were free to choose multiple answers.
As expected, marijuana arrests in Colorado broke after legalized marijuana. According to a October 2018 report by the Colorado Criminal Justice Research and Statistics Department, marijuana arrests decreased 56 percent from 12,709 to 6,153 between 2012 and 2017.
The Colorado Criminal Justice Research and Statistics Division's report also found that the total number of crimes related to the marijuana industry remained stable and accounted for a very small fraction of all crime. The most common industry-related offense was the slump, which accounted for 59 percent of all industry-related offenses in 2017.
At the same time, however, all forms of violent crime in Colorado have increased steadily in the past five years, according to the Colorado Bureau of Investigations' latest annual report on nationwide crime statistics.
Violent crimes, including killings and serious assaults, have increased by 25 percent from 2013 to 2017 and have increased further in recent years. The crime rate for real estate also increased nationwide during this period, but has since flattened and even decreased slightly in 2018.
A 2019 study on crime rates analysis in Colorado and other states concluded that legalizing marijuana recreational use appears to have little or no impact on the number of violent and property crimes.
Whether the rising crime rates in Colorado are related to the legalization of marijuana is hotly debated.
Governor Hickenlooper has said he is not yet ready to blame the legalization of marijuana for the increasing crime. At Fort Collins, Larimer County's sheriff Justin Smith recently told CNN that cannabis doesn't make a person more likely to commit a crime. Rather, he believes that legal marijuana will attract a "growing seasonal temporary population" who are more likely to commit a crime.
Use medical marijuana
Legalization of recreational marijuana in Colorado has led to a drop in the number of registered medical marijuana patients.
When adult marijuana sales began in January 2014, there were 111,030 patients in Colorado with valid ID. By March 2020, that number had dropped to 81,722.
The data suggest that medical marijuana patients have started to abandon the Colorado retail program in the state.
Participation in a state's medical marijuana program increases regulatory hurdles. Patients need to see their doctor every year to get a new referral and then pay a $ 25 processing fee.
The convenience of retail out-of-the-box retailing may be attractive to patients who still use marijuana for therapeutic purposes but who obtain it through the adult market.
Teen cannabis use
A secondary benefit of the Colorado marijuana industry is its impact on the rate of marijuana use among adolescents.
Federal survey data show that teenage marijuana use in Colorado has decreased since the legalization of recreational marijuana.
The percentage of students who used marijuana in the past month fell 11 percent between 2011 and 2017. In addition, adolescents who said they have ever tried cannabis dropped 11 percent over the same period.
According to a October 2018 report by the Colorado Division of Criminal Justice, legal marijuana has no impact on graduation rates or dropout rates in Colorado. Graduation rates have increased since 2012 while dropout rates have decreased.
Cannabis advocates argue that legalization helps limit teenage consumption by making it harder to buy marijuana. By obstructing the illegal market and imposing severe penalties on regulated cannabis companies for selling to minors, cannabis is becoming less accessible to minors.
The drop in marijuana use among teenagers in some areas of Colorado could also be partly attributed to youth education and prevention campaigns. In Denver, a recent survey found that 81 percent of young people between the ages of 13 and 17 said the prevention campaign had prevented them from consuming marijuana. Eighty-one percent of teenagers in this age group said they were not currently marijuana users.
As everywhere in the United States, the opioid crisis affects Colorado. Between 2000 and 2016, according to the Colorado Department of Public Health & Environment, 4027 Coloradans were killed in the opioid overdose epidemic. However, statistics suggest that legalizing marijuana in Colorado has a positive impact on the rate of opioid abuse.
Opioid abuse has decreased in Colorado since legal recreational marijuana was allowed. A 2017 study published in the American Journal of Public Health found that opioid-related deaths decreased by more than 6 percent in the two years after the state market for recreational marijuana opened in 2014.
The authors examined trends in monthly opiate overdose deaths in Colorado before and after the opening of the recreational marijuana state market. While several studies have shown a positive correlation between the decline in opioid use and the legalization of medical marijuana, the American Journal of Public Health was the first to examine the impact of the law on recreational marijuana.
Overview of marijuana laws in Colorado
Amendment 64, which was approved by Colorado voters in 2012, legalized adult marijuana ownership and established a regulated market and licensed commercial marijuana distribution system.
According to the law, adults over the age of 21 can legally buy and own up to 1 ounce of marijuana. Non-Colorado residents are only allowed to buy ¼ ounce. According to the laws of the Colorado pharmacy, adults can buy a mix of flowers, foods, and concentrates. Adults can also grow up to six plants, three of which may be in bloom, in a closed, locked room.
Legal medical marijuana has been available in Colorado since 2001. Qualified patients who have received a doctor's written approval can legally buy, own, and use up to 2 ounces of marijuana. Registered medical marijuana patients can also legally grow up to six plants, with no more than three ripe.
Both recreational and medical marijuana users must have some form of ID in accordance with Colorado pharmacy laws to purchase cannabis products. No more than 12 plants are allowed per residence, regardless of how many adults live there.
More about legalizing marijuana
These post-legalization statistics in Colorado tell part of the story of how Colorado has been doing since its legalized recreational marijuana.
What the numbers don't say is how Coloradans think about the policy change. According to a 2020 YouGov survey, 26 percent of Colorado adults said that legalizing recreational marijuana was "only a success", while another 45 percent said the change was "more of a success than a failure" was. Only 17 percent of Coloradans view marijuana laws as "more of a failure".
Since Colorado became a leader in 2012, 10 other states have legalized recreational marijuana use, and more are expected to do the same this year.
Search our interactive legalization card to learn more about current marijuana and pharmacy laws in Colorado and the United States.
Stay up to date with the growing legal cannabis industry by regularly visiting the Medical Marijuana, Inc. news site or by contacting us on Facebook and Twitter.