Has Colorado’s $100 Million a Month Experiment Succeeded?

By: Cecil King   

Has Colorado’s $100 Million a Month Experiment Succeeded?

Colorado’s cannabis sales for the month of August surpassed the $100 million mark. The citizens’ decision to take legislative control away from their elected representatives and vote overwhelmingly to pass legalized retail cannabis sales into law is paying off.

Since the start of legal sales on January 1, 2014, Colorado is now on track to break $1 billion in annual cannabis sales. This amazing accomplishment, going from $0 sales to $1 billion, has taken less than two years.

National media, including the New York Times, called the people’s Amendment 64 ending marijuana prohibition in Colorado an “experiment” intimating it would go horribly wrong and the state would fall into the abyss of increased crime, increased childhood addiction rates and other irreversible societal calamities. None of the predictions were true. They’ve had to eat their words.

Gov. John Hickenlooper, once opposed to Amendment 64, now admits that “the debate is over — this is a good-government issue,” and his administration is making legalization work.

The $100.6 million marijuana sales figure for August continues a month-to-month record-setting trend for 2015. Recreational sales came in at $59.2 million and medical marijuana tallied $41.4 million. The Colorado State Department of Revenue released the figures early October 2015.

Cannabis activists in Missouri can only look in stunned amazement at the economic prosperity cannabis has delivered to the Rocky Mountain state. Cannabis sales have soared to new highs establishing a sales trend that has the momentum to continue for some time.

Could Missouri come anywhere close to duplicating Colorado’s success? Many Missouri activists say it’s possible, but Missouri’s collective public opinion would have to overcome a stubborn “show-me” attitude that continues to keep Missouri on the sidelines. Activists in other states have already shown their fellow citizens there is little to fear, and much to gain, when creating a controlled regulatory system for legal cannabis.

Increasingly, more states have activists working hard to legalize cannabis. Every new state that legalizes cannabis has the potential to siphon sales away from Colorado. Minnesota could be a contender in the upper Midwest. Ohio could mount another legalization effort in 2016 after Prop 3’s two-to-one defeat in 2015. The other states are far west (California and Nevada) or far east (Maryland, Rhode Island, Maine, Delaware, Vermont, New York, Massachusetts and Connecticut).

Missouri could challenge Colorado’s top sales slot if Missouri passes a legalization initiative ahead of its Midwest neighbors siphoning cannatourist sales away from Colorado.

Colorado draws cannatourists from every surrounding state within a two-day road trip. That includes Texas, Oklahoma, Nebraska, Missouri, Iowa, and the eastern areas of Illinois, Wisconsin, Kentucky, Tennessee and Arkansas. Missouri would be a closer alternative than Colorado for some of these tourists ensuring a robust cannatourist market could easily develop in the Show-Me state.

Statistics from air flight travel data compiler Hopper.com illustrates that flight searches to Denver’s International Airport have rocketed to 25% on the national average since legalization. Midwest departure point cities average higher at 36% and include Nashville (63% increase), Minneapolis (58%), Detroit (53%), Cincinnati (47%), Madison (37%), Cleveland (37%), Indianapolis (36%), Milwaukee (35%), Omaha (32%), Kansas City (30%), Tampa (29%) and Houston (28%). Tourists have definitely looked to Colorado as a high-interest destination since the state legalized retail cannabis.

In 2016 and beyond, Colorado’s cannabis sales will continue unabated with no serious competition from the Midwest. The longer Missouri waits to pass a legalization initiative, millions of dollars in unrealized cannabis sales will have slipped away.

The cost of continued prohibition in Missouri not only represents a sales opportunity lost, but the state will drop far behind other states in building the infrastructure required to run a legal cannabis market. Primary and ancillary businesses cannot develop and the highly trained workers that would run the high-tech growing facilities, testing labs and retail establishments would simply not materialize in Missouri.

Traditional Missouri investors and business owners who may want to take part in a legal cannabis market would be compelled to search out of the state for opportunities.

Cannatourists are the unforeseen economic force that is driving legal sales in Colorado. Cannabis is becoming mainstream in the U.S. and throughout the world. Cannabis consumers have jobs, own businesses, own automobiles, own houses, take vacations and spend lots of money pursuing their pleasure.

A new legalized cannabis market could look like some of Missouri’s traditional markets from a demographic viewpoint. However, the psychographic variables of attitude, values, behavior, personality and culture of the Missouri cannabis consumer will be largely unknown until Missouri undertakes its own “experiment.”