Whichever way you look at it, Colorado is doing a fantastic job of proving just how beneficial the legalization of recreational cannabis can be. Not only has the black market for marijuana pretty much dried up state-wide and driven thousands of criminals off the streets, but the extent to which legal cannabis is benefiting the economy is nothing short of enormous.
The collective tax revenues generated by cannabis sales in 2014 and 2015 were impressive, but with the way things are going, 2016 is on-track to outpace both of these years combined. Incredibly, by the end of October this year, legal cannabis sales across Colorado had surpassed the $1 billion milestone. This is slightly more than the industry took in during 2015 in its entirety – the total for 2016 being likely to hit somewhere in the region of $1.3 billion by the end of the year.
In terms of total economic impact, experts estimate that the legal cannabis industry has been worth no less than $3 billion for Colorado in 2016. During the month of October alone, medical cannabis worth $35 million and recreational cannabis worth close to $83 million was sold legally in shops across Colorado. This represented a slight decrease from the totals of the month before, but was still an incredible 46% higher than October 2015. On the whole, it is now widely expected that total tax revenues generated by legal cannabis sales in Colorado for 2016 will surpass those of the last two years combined.
As promised prior to the legal cannabis legislation coming into effect, the vast majority of tax dollars generated by the industry will be invested directly into school construction projects and other education funds.
However, the way things are accelerating for the time being is not something that experts predict will continue long-term. The reason being that there are two major contributors to the incredible rate at which the industry is growing that are likely to slow significantly over the coming years.
The first of these is the way in which, as already mentioned, the attention of the cannabis community is moving away from the black market toward legal buying and selling routes. The legalization of cannabis in Colorado dealt an immediate and permanent hammer blow to illegal dealers state-wide, as cannabis users quickly began purchasing higher quality cannabis legally and often for lower prices. The result was and remains a huge jolt in acceleration for the legal cannabis market, but we’re now reaching a stage where this will slow significantly as the black market to a large extent becomes a non-entity.
On top of this, there’s also the way in which experts are predicting an inevitable slide in the number of tourists visiting Colorado throughout the year specifically for the state’s recreational cannabis policy. Until recently, Colorado had been something of a unique mecca for the cannabis community of the United States, attracting millions of visitors every year for little reason other than to make full use of the state’s relaxed cannabis policy. However, given the fact that recreational cannabis is now officially legal across nine North American states – one of which being California – it is highly unlikely that the same kinds of cannabis tourism figures will hold up for Colorado. Quite to the contrary – they’re likely to experience a nosedive.
Still, one potentially positive step forward for the cannabis industry in Colorado could be a change in classification at a Federal level. The cannabis industry remains entirely unique for the simple reason that marijuana in every form remains entirely illegal at a Federal level, despite being legal at a state level in Colorado. And as we’ve covered quite a number of times in previous articles, it isn’t looking entirely likely that the Trump administration will be in any hurry to change things. That is, unless they decide to move things in entirely the wrong direction.
In Steps Sessions
As it stands, the biggest threat the entire American cannabis community currently faces exists in the form of Attorney General Jeff Sessions. Out of the three or four candidates that could have been selected for the position, Sessions was by far and wide the worst-case scenario. To say that this particular individual has had a hostile attitude toward cannabis policy reform over recent years would be an understatement to say the least. He has gone on record to state that “good people don’t smoke marijuana” and that the changes made to cannabis laws at a state level to date have been a “tragic mistake”. He also repeatedly lashed out at the Obama Administration for not clamping down on cannabis use in states that permit the use of marijuana for medical purposes.
The long and short of it being that Sessions doesn’t care that 60% of American citizens are in favour of legalization – he wants to take things back to an era of total prohibition.
It all sounds like an outright impossibility, but what’s truly terrifying is just how possible it is. Given the fact that cannabis is still illegal at a Federal level, anyone who uses, cultivates, sells or in any way is involved with cannabis is breaking Federal laws. Which in turn means that each and every one of these people could also be prosecuted at a Federal level with absolutely no legal grounds for complaint or defence.
Not only is Sessions in favour of prosecuting anyone that contravenes Federal cannabis law, but he also supports the idea of local police forces being able to keep the assets of any cannabis convicts they bust for their own use. Or in other words, he supports exactly the kinds of policies that actively encourage local law enforcement to be ridiculously heavy handed when it comes to policing cannabis’ use and distribution. As far as critics are concerned, the appointment of Sessions has the very real potential to spark a new-generation war on cannabis the likes of which we’ve never seen. Common sense seems to argue it won’t happen, but the fact that it could is unnerving to say the least.
In the meantime, the cannabis community in general across the United States is being urged to tread with caution and to follow all applicable state laws as closely and meticulously as possible. The very last thing the fledgling industry need right now is to give critics like Sessions any excuse whatsoever to consider enforcing Federal cannabis laws at state level. The Trump administration in general represents something of a ‘thin ice’ scenario for the cannabis community – one not to be ignored or underestimated in its fragility.
Colorado will have a massive tax windfall with such high sales. Tell us how you would spend it in the comments below.