The trend of summer highs for Colorado’s cannabis industry continued in July as monthly recreational sales surpassed the $100 million mark for the first time since legalization.
The Cannabist’s calculations of the latest Colorado marijuana tax data show that the state’s cannabis shops sold nearly $137 million in marijuana products — $101.1 million in adult-use sales and another $35.8 million in medical marijuana sales — during the month of July. Barring any significant variances in monthly receipts submitted to the state, the $136.9 million would set a new monthly record — the previous being $131.69 million in March.
The monthly sales tax reports posted by the Colorado Department of Revenue and the subsequent extrapolations by The Cannabist customarily come with their share of caveats: The reported receipts largely reflect sales made in July but could vary because of aspects such as incomplete or late-filed returns.
The July 2017 sales figures, however, come with some added wrinkles. It’s the first month to reflect a new taxing structure for recreational marijuana.
As a result of recent legislation, the retail marijuana special sales tax rate increased to 15 percent from 10 percent and exempted recreational marijuana products from the 2.9 percent state sales tax rate. Accessories or other goods not containing marijuana are still subject to the standard 2.9 percent sales tax rate.
“Due to this tax change, the marijuana industry is in a period of transition,” Department of Revenue officials stated in a footnote to the sales tax report filed Tuesday. “The value reported (for the retail marijuana tax revenue from the 2.9 percent state sales tax) may include, but is not limited to: errors filed by taxpayers that may be corrected by amended returns in the future, prior period return payments and 2.9 percent state sales tax collected on accessories.”
Department of Revenue reported $735,326 was remitted by retailers at the 2.9 percent tax rate.
Larson Silbaugh, senior economist for the Colorado Legislative Council Staff, told The Cannabist that the 2.9 percent rate collected in July “looks inflated.”
“This is the first month, there’s an education component” to vendors implementing the new system, Silbaugh said.
As such, The Cannabist’s calculations for the July 2017 recreational sales are based primarily on revenue reported for the new 15 percent sales tax.
Math aside, the July haul shows a developing trend for Colorado’s 4-year-old industry: The summer season is good for business.
Last year, monthly medical and recreational cannabis sales consistently eclipsed $100 million starting in June 2016. Monthly combined sales of medical and recreational cannabis — flower, concentrates, edibles and accessories — have not dipped below that mark since.
Seven months through 2017, Colorado’s cannabis industry tallied $888 million in sales, a 23.3 percent increase from the same period a year ago. During the first seven months of the year, the cumulative taxes and fees generated were above $139 million.
Economists and state officials have projected that the annual growth rates for Colorado’s cannabis sales will eventually moderate as the local market matures and other states adopt recreational cannabis measures.
Original article via TheCannabist