Bolstered by decriminalization laws in Washington state and Colorado, marijuana could become an $8.2 billion retail business by 2018, an industry trade journal says.
That’s a 33% jump over earlier forecasts and a five-fold increase over expected 2014 retail and medical sales, according to Marijuana Business Daily.
The publication boosted 2018 sales estimates due largely to a Justice Department decision to take a hands-off approach to drug enforcement in Colorado and Washington, which allow limited, legal use of pot, and the assumption that up to six more states could allow recreational and medical use.
Chris Walsh, editor of CannaBusiness Media, which publishes Marijuana Business Daily, said the $8.2 billion sales estimate could be conservative and doesn’t include wholesale revenue or marijuana-related products. “The reality of retail sales could be larger,” he said.
Recreational sales are predicted to hit up to $4.2 billion by 2018; medicinal sales up to $4 billion. The year would mark the first that recreational retail sale revenue would outpace medicinal sales, Marijuana Business Daily reports.
In Colorado, where retail sale of recreational pot began Jan. 1, state budget experts expect $1 billion in sales in 2015. Washington, where recreational sales begin June, could see $1.5 billion in annual sales by 2015.
Twenty states and the District of Columbia have legalized medical or recreational marijuana use. California, New York, Florida and New York are considering legalizing medicinal or recreational use. Alaska voters will decide whether to legalize recreational use in August.
How does $8 billion in annual sales compare to other markets? It’s similar to the annual U.S. market for pet medications and the global market for premium chocolate, according to market researchers Packaged Facts and Mintel.
Tax revenues from Colorado’s sales of medical and recreational marijuana in February increased from the previous month, according to figures released Wednesday by the state.
Colorado collected $3.2 million in February, below the state’s projection of $3.7 million but slightly above above the $2.9 million it gathered in January.
In February, Colorado collected $1.43 million from a special 10 percent sales tax on recreational marijuana, plus another $438,253 from the state’s standard 2.9 percent sales tax.
The 2.9 percent sales tax on medical marijuana produced revenues of $1.02 million in February, an increase from the $913,519 collected in January and far above the $791,000 the state had projected in February.
Conversely, the state projected that the 15 percent excise tax on the sale of recreational marijuana would bring in $739,330 — the actual total was $339,615, 54 percent below expectations. The 15 percent excise tax produced $195,318 in January.
As was the case in January, Denver County generated the largest amount of tax revenue, with the 2.9 percent sales tax on medical marijuana totaling $483,432. The 2.9 percent tax on recreational pot brought in $245,709, with the 10 percent sales tax adding another $710,930.
Just a few months into the first year of legalized recreational marijuana sales, finding certainty when it comes to pot revenues has proved to be elusive. In February, Gov. John Hickenlooper’s budget office predicted tax and fee revenues from marijuana would total about $134 million in the next fiscal year; however, a month later, the state’s Legislative Council said the total would be half as much.
Throughout Dr. Scott Bentz’s career in emergency medicine, marijuana wasn’t something he much worried about.
Perhaps a person a month would come in feeling panicky after smoking pot. A sedative and a quiet room usually did the trick.
“It’s the easiest emergency medicine case you’re going to see,” said Bentz, the medical director of emergency services at Presbyterian/St. Luke’s Medical Center in Denver.
And then came the day a man arrived in the emergency room so sedated and breathing so slowly after eating a marijuana-infused edible that he was nearly comatose.
For the past few months, Bentz said, he’s seen more and more patients at the hospital who have consumed marijuana-infused products. And, while the cases don’t come close in number or severity to alcohol-related cases, Bentz said they show the kind of problems that can go along with edible marijuana — especially for those trying pot for the first time and who see edibles as a more appealing access point.
Potency amounts vary. It’s far easier to overconsume than it is with smoking. And the products can affect everyone differently, from intense anxiety to excessive sedation.
“The edibles are just a whole different ball of wax,” Bentz said. “You just don’t know what you’re going to get.”
The potential risks of edibles are receiving new attention after the death of a Wyoming college student last month. Levy Thamba, 19, became agitated after eating marijuana-infused cookies and then leapt to his death from a hotel balcony, according to a coroner’s report released this week. His death was classified as an accident.
Denver police are still investigating, and state law could allow for criminal charges against whoever gave the underage Thamba the cookies, though police spokesman Sonny Jackson wouldn’t comment on the possibility of charges in the case.
“I’m not going to speculate one way or another,” Jackson said Thursday.
A crackdown on Colorado medical marijuana patients could trim the number of marijuana plants being legally grown in the state by tens of thousands, according to new figures from the state health department.
The crackdown focuses on patients authorized to grow more than the standard number of marijuana plants, as many as 99 plants for some. While those patients make up only about 2 percent of the state’s 111,000 registered patients, the patients are authorized to grow more than 85,000 marijuana plants — nearly 12 percent of the total plants that registered medical marijuana patients are allowed to grow.
The state’s new scrutiny of patients with large plant counts comes after an audit last year warned that such patients may be “distributing the excess marijuana to individuals without (medical marijuana) cards.”
But medical marijuana advocates say the crackdown could also have far-reaching impacts on patients who use the higher-than-normal plant counts to create concentrated treatments, which they say help the most serious conditions. And the crackdown could also affect the supply for medical marijuana dispensaries, which are limited in how much marijuana they can grow by the plant counts of the patients who have designated the stores to grow for them.
“Patients have done nothing wrong here,” Teri Robnett, a medical-marijuana advocate and patient who is authorized to grow 24 plants, said last week during a meeting where officials announced the crackdown. “And yet patients will be the ones who suffer.”
The controversy reaches deep into the folds of Colorado’s wrinkled marijuana laws.
Colorado health officials on Friday announced a new crackdown on medical marijuana patients whose doctors have given them permission to grow more than the standard number of marijuana plants.
Starting Monday, the Colorado Health Department will send out letters to doctors who recommended the elevated plant counts and the patients who benefit, requiring them to provide more documentation on the need for the extra plants.
Dr. Larry Wolk, the department’s executive director, said doctors must provide not only medical information about the patients that caused the elevated recommendations but also studies showing that the patients’ conditions require more medical marijuana than average.
The state agency overseeing Colorado’s historic experiment in marijuana legalization is adding enforcement agents, data analysis and undercover operatives — steps officials say will help them better hold businesses accountable.
A year ago, a state audit criticized what was then the Medical Marijuana Enforcement Division for failing to track marijuana as promised, managing its budget poorly and not clearly defining its role.
More stable funding from application and licensing fees has what is now the Marijuana Enforcement Division on stronger financial footing. The agency has a new director — its third in less than four years — and finally has cleared a backlog of medical marijuana license applications that dated to mid-2010.
Still, some industry officials wonder whether the agency is equipped to deal with challenges that lie ahead, including more new business applications and enforcement of product testing.
By the end of the fiscal year, in June, the division says it expects to employ between 50 and 55 people, up from about 30 now.
The increased manpower will allow for field offices in Colorado Springs, the Grand Junction area and northern Colorado.
The division closed three field offices and laid off staff in 2012 after a moratorium on new business applications forced it to stretch operating expenses budgeted for one year over two.
“They are really going to staff this, put boots on the ground,” said Jeff Gard, a Boulder lawyer who represents marijuana businesses. “If you have been getting away with stuff because the state was underfunded, you may find yourself not only out of business but in jail.”
Colorado is trying to stay ahead of the curve as the state’s landmark legalization of both recreational and medical marijuana heads into its fourth month by making cannabis information available to the public, while also launching a new ad campaign warning the public against driving while high.
Colorado last week unveiled a new website, colorado.gov/marijuana, meant to answer frequently asked questions about legalized cannabis, including its health impacts. The site reportedly incorporates the latest information and resources from Colorado’s state departments of revenue, education, transportation, human services and environment.
“State agencies worked together to develop this website as a reliable resource for parents, consumers, tourists and others who want the facts about marijuana’s health effects and the laws in Colorado,” Dr. Larry Wolk, executive director and chief medical officer at the Colorado department of public health and environment, said a statement.
Wolk says his group has requested $3.7 million this year from Colorado’s general assembly to keep the website as up-to-date as possible with the latest research and educational materials.
As it seeks to educate the public about marijuana, Colorado also began a $500,000 advertising campaign earlier this month warning cannabis consumers not to drive while under the influence. Four Denver-based agencies reportedly handled the campaign, part of which is aimed at Colorado’s Latino population.
Colorado legislative economists on Tuesday predicted that recreational marijuana taxes will bring in only half of what Gov. John Hickenlooper expects they will.
A forecast produced by economists at the nonpartisan Colorado Legislative Council projects taxes on recreational marijuana will generate about $65 million in the fiscal year beginning in July. Hickenlooper’s projection, released last month, expects nearly twice that — $125 million.
The new prediction further adds to the debate over how lucrative first-in-the-nation taxes on recreational marijuana will be for the state’s coffers. In January, tax revenue came in on pace to be far below previous predictions for the last six months of the current fiscal year.
But Legislative Council economist Larson Silbaugh told members of the legislature’s Joint Budget Committee on Tuesday that too many variables — from the low number of stores open, to the high interest in history-making marijuana purchases — make the January numbers unreliable predictors of what’s to come.
“You can basically use that January number to justify any forecast you want,” he said.
Instead, Silbaugh said Legislative Council economists are more pessimistic than the governor’s economists about how many people will stay in the recreational marijuana market long-term. Recreational marijuana costs about 20 percent more than medical marijuana, he said. And that’s before the hefty taxes on recreational marijuana are applied.
DENVER (AP) – Colorado clarified its marijuana packaging requirements Monday, giving medical pot the same rules as pot for recreational pot.
But Gov. John Hickenlooper says it’s too soon to consider a new law limiting potency or making other big changes to the marijuana market.
The new law requires edible marijuana sold to medical marijuana patients to meet the same packaging standards as pot sold to recreational customers.
The packaging must be opaque and childproof. Another new law signed Monday gives allows local governments that want to run criminal background checks on people working in the marijuana industry to submit fingerprints to the Colorado Bureau of Investigation.
Everyone working in the industry already completes state-level background checks.
One of the disappointing aspects of marijuana legalization in Colorado and Washington is that neither state allows the sort of cannabis cafés you will find in Amsterdam and other Dutch cities, which sell marijuana along with food and beverages. Both states ban on-site consumption at licensed pot stores, which are barred from selling anything other than marijuana products and paraphernalia. Furthermore, Colorado’s Amendment 64 says “nothing in this section shall permit consumption that is conducted openly and publicly,” while Washington’s I-502 bans consumption “in view of the general public.” Finally, both states have laws that ban smoking inside bars and restaurants. But there are various possible ways around these restrictions, including the route taken by Cheryl and David Fanelli, who plan to open what KUSA, the NBC station in Denver, describes as “the only legally sanctioned cannabis club in the country” this month in Nederland (elevation: 8,228 feet; population: 1,500)
The Fanellis are taking advantage of an exception to the Colorado Clean Indoor Air Act for “a place of employment that is not open to the public and that is under the control of an employer that employs three or fewer employees.” The same exception covers VFW posts, Elk’s clubs, and other private, members-only spaces where smoking is allowed. The Fanelli’s establishment, Club Ned, will be open only to dues-paying members, who will have to make appointments and bring their own pot. But Club Ned will have tables and sell refreshments, creating something resembling the convivial, tavern-like atmosphere at Dutch “coffee shops” (which are not legal, strictly speaking, but have been tolerated for decades). Since David Fanelli mentions an “acoustical stage area,” I gather that there will be live music as well.