Colorado: a growing recreational market, a slowing medical market, and a black market that persists

When Colorado legalized cannabis in 2014, the goal was to regulate and tax existing cannabis consumption while directly tackling the black market. While the legal market has never been stronger, the black market persists in the state.

In his 2017 annual report, freshly released, the State of Colorado notes that the boom in the recreational sector is accompanied by a slowdown in the medical cannabis industry.

Of the 376 new companies registered in 2017, 77% targeted the adult-use cannabis market, confirming the 2016 trend which saw a 221% increase in adult licenses, while the number of medical licenses rose by only 71%.

The report also shows that the percentage of stores that verify customers’ ages to prevent sales to minors rose from 94.3% in 2016 to 95.11% in 2017, a statistic that yet does not satisfy Jim Burack, Director of Marijuana Enforcement Division We are delighted to see that the percentage of licensees performing age checks is increasing compared to 2016, but this number is still not good enough.«

Over the year, the state produced 500 tons of cannabis, consumed in various forms. Cannabis dispensaries sold 11.1 million’edibles (cannabis-infused edibles), 186 tons of flower, and 13 tons of concentrates.

The more than 500 state-run dispensaries have not, however, put an end to the black market, mainly for two reasons:

• The high prices of legal cannabis are forcing some consumers to obtain it from the black market.
• Cannabis produced in Colorado fuels US states that have not yet legalized, particularly Florida, Illinois, and Texas.

A situation that had forced Colorado in early 2017 to reduce the number of plants that individuals can grow in order to avoid feeding the black market.

A recent study by BDS Analytics also noted that cannabis use was on the rise in the state. 35% of the survey respondents reported having used cannabis in the first quarter of the year, compared with 25% in 2017.