Despite steady gains seen by Colorado’s cannabis industry for six full years, with an average growth rate of 21.6% annually since the start of adult-use sales, the Mile High market shows no signs of plateauing.
Of the state’s 336 municipalities, 228 do not allow commercial cannabis activity — a clear opening for more growth that may come as cities and counties look to make up for budget shortfalls.
“I expect about half a dozen municipalities here in Colorado to open their doors to cannabis companies,” says Truman Bradley, executive director of the state’s largest trade association, the Marijuana Industry Group. “That’s a growth of the overall market and will help adult-use customers as well as medical patients who would have had to travel further for their medicine.”
The percentage of adults who use cannabis has also been on a steady rise, growing from 24% to 42% since 2017, according to data from the Colorado-based analytics firm BDSA. That number is still a far cry from the market penetration of alcohol at 65% to 75%, depending on the market. “Additionally, the rise of the ancillary companies, a.k.a. the picks and shovels, is a trend that I don’t see stopping anytime soon,” Bradley adds.
Focus On: Colorado
Colorado has been at the forefront of legalization in America since allowing medical marijuana in 2000 and establishing a comprehensive licensing program for dispensaries in 2008, the first of its kind and a model that would allow the Centennial State to transition with relative ease from a medical-only market to a medical and recreational market following the historic vote legalizing the adult use of marijuana in 2012.
Rec sales began on New Year’s Day 2014, and Colorado has exploded into one of the most lucrative markets in the country. With sales booming in 2020, Colorado could hit $2 billion in sales and shows no signs of slowing down.
Although the COVID pandemic has had a devastating impact on people’s lives and the economy, legal cannabis is one of the few industries that has thrived throughout 2020, largely due to the state deeming it an “essential” industry.
“I think 2020 will be the year that is known for how we responded to COVID,” Marijuana Enforcement Division director Jim Burack says, pointing to the flexibility shown by multiple government entities. “We very quickly were able to engineer emergency rules that allowed for online sales … and ensuring that we were — to the extant we could — really prioritizing health and safety for customers and for employees.”
Looking back at the recession of 2008, Bradley says cannabis played a big role in filling empty warehouses, putting the construction industry back to work and generally revitalizing the economy. He believes cannabis has the potential to do the same again as the nation attempts to climb out of another major recession.
“I think the old saying that tough times don’t last, but tough people do is really apt for this industry,” Bradley says. “The cannabis industry has always been led by pioneers, people who are willing to take a chance, but people who also wanted to do it the right way and got into it with the right intentions.”
One particularly exciting development in Colorado is the advent of new license types, including delivery services and two different hospitality licenses. With the huge influx of tourists to Colorado each year, the hospitality licenses are particularly important, giving out-of-state visitors a way to consume cannabis compliantly.
Burack says there is a hospitality license that allows sales and consumption on-site, such as a dispensary/consumption lounge, and another that allows consumption, but not sales, that would be applicable to a tour bus, for example. These licenses require local jurisdiction opt-in, “but we do hear a lot of discussion about local jurisdictions talking about opting-in or going through the process, whether it’s a ballot initiative or through their city council,” Burack says.
With the inception of new license types, “Colorado continues to be on the forefront of cannabis legalization and regulation,” Bradley says.
Social equity and justice
Another subject that is at the forefront of any industry conversation these days is social equity and social justice. Burack says social equity is one of the top priorities of the state’s Marijuana Enforcement Division in 2021, and it’s also one of the top priorities of MIG.
“I’m excited to see more people of color coming into this industry,” Bradley says. “It’s long overdue and it’s something that needs to happen. My hope and my belief is that when we look back a year from now, we will see more people of color owning businesses, as well as being high up on executive teams and really being leaders in the space. That’s something that is committed to and I’m excited to see it unfold.”
On the social justice front, Colorado recently took a major step in correcting the past injustices of marijuana-related criminal convictions, with Governor Jared Polis signing an executive order granting pardons to people who have been convicted of possessing one ounce or less of cannabis.
“We are finally cleaning up some of the inequities of the past by pardoning 2,732 convictions for Coloradans who simply had an ounce of marijuana or less,” the governor said. “It’s ridiculous how being written up for smoking a joint in the 1970s has followed some Coloradans throughout their lives and gotten in the way of their success.”