Marijuana sales hit another record in March, according to Colorado Department of Revenue data released on May 11, with dispensaries selling more weed that month than in any previous March.
But that success will be short-lived, according to a budget forecast released one day later, taking COVID-19's economic impact into account.
The May 12 report from the Governor's Office of State Planning and Budgeting predicts that declines in tourism and worker wages across Colorado are likely to lead to a 2.7 percent dip in marijuana sales tax revenue across the state during the 2020-’21 fiscal year, which runs from July 1, 2020, to June 30, 2021.
While that might seem like a modest decrease compared to a 63 percent reduction in expected revenue from newly legal sports gambling operations, it would be the first time that marijuana sales tax revenues didn't jump year over year, whether fiscal or calendar, since recreational dispensaries opened in 2014. And until more tourists return to Colorado, dispensaries will be feeling a stiff punch to the gut.
"Estimates prepared for the Department of Revenue suggest that tourists accounted for 7 to 9 percent of marijuana consumption in Colorado between 2014 and 2017," the report notes, adding that marijuana sales tax revenue is expected to drop to under $300 million through June 2021.
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Colorado dispensary sales started getting bumpy in late March, when state and local stay-at-home orders were introduced and only essential businesses were allowed to remain open. Recreational pot shops were eventually designated as essential businesses by both state and local governments, but not before going through a back-and-forth of regulatory updates that included mandatory curbside sales for less than a week, and a three-hour period during which Denver residents believed the mayor was going to close dispensaries and liquor stores.
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The Denver closures didn't happen, but the hysteria led to another quick spike in dispensary sales on March 23, near the end of a month that had already seen plenty of bulk purchasing by customers. March eventually accounted for over $161 million in statewide dispensary sales, DOR data shows.
April's sales figures haven't been released yet, but initial reports from dispensary analytic trackers show that the 4/20 holiday and the arrival of government stimulus checks should help sales numbers stay afloat for that month.
But with marijuana's unofficial holiday and panic buying behind us, the lack of tourism will definitely be felt at dispensaries, when marijuana sales typically peak.
Although the report projects that marijuana sales will increase over $308 million during the 2021-22 fiscal year, that's significantly lower than the 15 percent jump originally forecast.