Monthly marijuana sales of $100 million the ‘new norm’ in Colorado

Chalk up another milestone month for Colorado cannabis sales.

The $127.7 million worth of flower, edibles and concentrates purchased in May from the state’s marijuana shops didn’t set a record for monthly sales, though. That honor still goes to March of this year, when sales totaled $131.7 million, according to The Cannabist’s extrapolations of Colorado marijuana tax data.

May’s benchmark, rather, is one of consistency.

It marked the 12th consecutive month that Colorado marijuana sales topped $100 million.

“I think that $100 million a month (in sales) are the new norm,” said Bethany Gomez, director of research for Brightfield Group, a market research firm focused on the cannabis industry.

Some notable stats from the 12-month run:

• Altogether, the monthly sales reached $1.4 billion.
• Colorado collected nearly $223 million in taxes and license fees.
• Recreational sales have consistently taken a two-thirds share of the monthly totals.

For May, recreational-use sales accounted for about $90.1 million and those from medical marijuana contributed just over $37.5 million.

The industry’s 2017 cumulative sales through five months neared $620 million, generating close to $96 million in state revenue from taxes and fees, The Cannabist’s calculations show.

Total sales for the first five months of 2017 were up roughly 27 percent from the same period last year. And that year-to-date growth rate has held steady for two months in a row.

Colorado’s marijuana industry remains in expansion mode, Gomez said, but the sales trends are indicative that the market is approaching maturity.

“What you’re seeing in Colorado is similar to other industries, we’re starting to see lower double-digit growth rates, rather than the triple-digit growth rates,” she said. “That time of massive growth expansion in Colorado, I think, is over.”

Recreational sales have buoyed Colorado’s marijuana industry for the past four years.

In May 2014 (when the recreational market was in its infancy and still being built out), adult-use sales accounted for 40 percent of that month’s total sales. In May 2017, that share was 70 percent.

The state’s monthly medical marijuana sales have remained fairly flat — inching up from an average $32.2 million in 2014, to $34 million in 2015, to $36.5 million in 2016, and $36.7 million for 2017 thus far. The state’s patient population, however, has declined.

As of May 31, 2017, a total of 86,964 patients had an active medical marijuana registration, according to the Colorado Department of Public Health and Environment. A year before, that figure was 106,066.

Incentive for patients to enlist in the medical registry has been reduced by falling prices in Colorado’s adult-use market, according to an April 2017 report by New Frontier Data, a cannabis analytics firm.

But while the adult-use market was expected to cannibalize Colorado’s medical market growth, the New Frontier analysis found that strong demand for pricey concentrates and edibles has offset the decline in patient participation.

Gomez echoed other analysts’ past statements to The Cannabist that Colorado’s marijuana industry is nearing a plateau and should expect a deceleration in growth rates — but not necessarily a decline in sales.

Even as states such as Nevada and California initiate recreational sales, Colorado’s marijuana industry sales shouldn’t take too much of a hit, she said. As it matures, the market remains self-contained.

“What we’re seeing in Colorado is an increase of cannabis as a lifestyle and a component of a wellness lifestyle,” she said.

That includes people who weren’t buying in the black market and now have subtly introduced it into their lifestyle by using cannabis to address minor medical concerns, microdosing, or substituting it in place of an evening glass of wine or beer, she said.

“There is increased innovation in the product category, and that’s continuing,” she said. “Consumption patterns haven’t really settled in the recreational market yet; people are still experimenting. There is still a lot of room for change there.”

In and beyond Colorado, cannabis consumers have shifted from the traditional dried marijuana flower to infused edibles and concentrates.

New Frontier’s analysis found that recreational demand for flower fell from 85 percent in January to 64 percent in December. Medical demand saw a similar decline of 87 percent to 65 percent.

While demand for concentrates, edibles and other infused products has been strong across the legal cannabis states, it has been “noticeably robust” in Colorado’s adult-use market, the report found. Midway through 2016 — around the time the state’s sales began consistently topping $100 million — adult-use shops were selling three times more infused products as medical dispensaries, according to New Frontier.

Cannabist editor Alex Pasquariello and digital producer Aleta Labak contributed to this report.