The decline in popularity of Colorado’s medical marijuana program is continuing, largely thanks to the impact of legal recreational cannabis.
Medical cannabis has been legal in Colorado since 2000. By 2011, the number of registered patients grew to a peak of 128,698. A cannabis trailblazer, Colorado was among the first states to also legalize recreational marijuana, and retail sales started in 2014. At that point, the number of registered patients was 111,000. But as at last month, the number had plummeted to around 64,400.
There are benefits for patients staying in the program. While medical marijuana is subject to a 2.9 percent state sales tax, recreational products are subject to a 15 percent sales tax and a 15 percent excise tax. Cannabis is a cash cow for Colorado, but on the supply side of things, patients are facing challenges as many dispensaries in the state have changed focus to recreational sales only.
In May this year, total medical marijuana sales reached $14,771,263 according to the Colorado Department of Revenue, compared to recreational racking up $98,403,225. In May last year, medical sales were $14,984,061 vs $111,078,122 for recreational. The biggest month for medical was back in July 2020 – $43,268,565. That month, retail marijuana sales hit $183,106,003; also a peak.
To date, cumulative medical and recreational sales combined have eclipsed $16 billion.
Colorado’s not alone in its medical program woes – most other medical states that have subsequently allowed adult-use cannabis have experienced an exodus. In some other states, they’ve been taking action to try and stem the loss with strategies such as cutting or abolishing medical cannabis card costs.
Colorado is going in the other direction, upping fees from $29.50 to $52 beginning October 2024. The reason for the increase is the state’s medical program is exclusively funded by the application processing fee and does not receive funding from any other sources. The Colorado Department of Health says the current fee does not generate enough revenue to sustain the program, nor for modernizing the Medical Marijuana Registry System (MMRS), by 2030 or 2031.
It remains to be seen whether that modernization effort will be worth it given the ongoing drop-off, and what Colorado authorities intend to do about it.
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