Tax revenues from the sale of cannabis in Colorado is estimated to decline by ~11% in fiscal year 2023-24 compared to the prior year as the state has seen fewer people come from surrounding states to purchase cannabis.
In 2012, Colorado, along with Washington State, were the first states to legalize marijuana for recreational use. There are now 24 states plus the District of Columbia where recreational cannabis is legal.
Because of the increase in states with recreational dispensaries, travelling across state lines to purchase marijuana, known as marijuana tourism, isn’t as big as it used to be. New Mexico, which borders Colorado to the south, has legalized recreational marijuana, and Colorado’s western neighbor, Utah, has legalized it for medical use. Recreational use is also legal in nearby Arizona.
Statistics from the Colorado Legislative Economic Staff’s Economic and Revenue Forecast released this month projects marijuana tax revenue of $195M for FY 2023-24. The following fiscal year, the figure is expected to decline to $189.9M. However, in FY 25-26, the revenue is expected to rise to $195.2M. The increase is expected due to a rebound in consumption and prices.
“Prices for marijuana fell as pandemic-induced demand waned, marijuana tourism became less pronounced, and as the market matured,” the report states, adding that the states first to legalize are seeing the biggest declines.
H/T: seekingalpha.com
