Denver's Hold on Colorado's Marijuana Market Is Shrinking

Denver is still the center of commercial marijuana in Colorado, but the city's grip on the market has loosened significantly, according to dispensary sales data.

An annual progress report from the Denver Department of Excise and Licenses shows that Denver dispensaries accounted for nearly half of all marijuana sales in Colorado in 2014, when recreational sales first began. That percentage has dropped every year but one since then, however, going from 48.3 percent in 2014 to 30.9 percent in 2021.

"This downward trend, which has been consistent since the implementation of retail marijuana sales in 2014, indicates marijuana sales growth outside of the City and County of Denver has been increasing faster than within the city," the report reads.

Statewide marijuana sales reached a new high in 2021, crossing over $2.2 billion, but Denver wasn't responsible for that growth. In a record-breaking year for dispensaries across Colorado, sales in Denver actually dropped about 4 percent, going from $715.7 million in 2020 to $688.8 million in 2021.

Dispensary owners have claimed that plummeting wholesale marijuana prices are more responsible for the falling marijuana sales figures than actual demand, and that sales volume has largely remained the same.

Still, dispensary sales numbers are on track to continue dropping in Denver as well as the rest of Colorado in 2022, according to the state Department of Revenue. And sales aren't all that are decreasing in Denver: Although the city still has over 200 different dispensaries, over ten pot shops have closed or been bought out since April.

Despite declining sales figures and a handful of stores closing, local taxes collected from the marijuana industry reached over $72.4 million in 2021, a new record that accounts for over 5 percent of Denver's general fund revenue. Excise and Licenses projects that number to go even higher in 2022, breaking $85 million by year's end.

Since a 2 percent affordable-housing tax was added to Denver recreational marijuana sales in 2018, the city has raised an additional $31 million. In 2022, Excise and Licenses estimates, that tax and other marijuana revenues will fund over $22 million in affordable-housing initiatives, as well as another $3.4 million that will go toward Denver's Support Team Assisted Response (STAR) crisis intervention program.