Colorado’s cannabis sales break records with $1.75B in 2019

Bethan Rose Jenkins, Cannabis News Writer/Editorial

Colorado’s cannabis industry might have looked like it was sinking this time last year. However, based on recently published data from the Colorado Department of Revenue, the state’s market is seeing a rapid surge in growth and stability. 

In 2019, cannabis retail stores in Colorado pulled in almost $1.75 billion in sales; signifying a new annual record. From this amount, tax revenue in excess of $302.4 million was earned for the state; sprinkled around a handful of funding programs, including drug education, law enforcement, public health, public safety and school construction.

When compared with sales figures from the same time in 2018, Colorado’s cannabis market has experienced a 13 percent surge in revenue. Previously, despite the fact that Colorado boasts one of the most well-established cannabis markets in the United States, the years 2017-2018 saw a mere 2.5 percent year-over-year growth rate.

“To see it turn around in 2019 is a bullish indicator that price compression can’t keep the popularity of legal cannabis down,” said the managing director at cannabis industry data and insight firm BDS Analytics, Tom Adams. Analysts at his firm have attributed the formerly tedious revenue growth rate of Colorado’s cannabis market to slumps in flower and bud prices.

Changes in consumer behavior attributed to rise in Colorado’s cannabis sales 

Notable trends have started to transpire as Colorado’s cannabis market matures. Non-flower cannabis products are starting to proliferate throughout the market and buyers are turning their attention towards these new avenues. Analysts at BDS Analytics have drawn attention to the fact that non-flower cannabis products are becoming increasingly available to consumers. Nonetheless, the state remains a flower-driven market. 

According to a report released mid-2019 by Colorado’s Marijuana Enforcement Division, the reason why non-flower products have commanded a rising share of total sales is down to growth in numerous categories – including concentrates and edibles – as opposed to shrinking of the flower market. In fact, even as consumers continue to enjoy the rollout of fresh product ranges, flower is still the single-highest volume category in Colorado’s cannabis market.

In addition to growing demand for non-flower products, consumer behavior is changing; people are becoming more comfortable about purchasing pot products from Colorado’s dispensaries. As a direct effect of cannabis-infused beverages, edibles and vapes suffusing throughout Colorado’s legal cannabis market, smaller market share has been noticeable among flower products. This tells us that consumers are being enticed by fresh and innovative products. 

In addition to this, data from BDS Analytics informs market players about the shopping patterns of their consumers. Previous studies carried out by BDS revealed that more adults have been consuming cannabis within the past six months; many consider cannabis an essential item on their regular shopping lists. 

“It’s just become a part of people’s lives more and more,” concluded Adams.

Edibles sales expected to be the next big moneymaker for Colorado’s cannabis sales

Industry analysts foresee exponential growth on the horizon for Colorado’s cannabis market. This growth will be rooted in the edibles sector; a prediction held by many analysts, and particularly so since Curaleaf Holdings, Inc. announced it will purchase an edibles company located in Colorado called BlueKudu. 

What makes this deal so important, you ask? Well, not only is Curaleaf one of the biggest companies in the game but also, BlueKudu is renowned for developing products using the highest quality ingredients sourced from Rainforest Alliance Fair Trade Certified Farms. The company was founded in 2011, making it one of the longest-operating edible manufacturers in the state.

“Colorado is the second largest cannabis market in the U.S., with sales surpassing $1.7 billion in 2019,” said the Chief Executive Officer of Curaleaf, Joe Lusardi. “With over eight years of operating history, BlueKudu has developed a strong brand for customers seeking premium cannabis products in a diverse range of flavors and formulations. BlueKudu’s established production and distribution capabilities will allow Curaleaf to seamlessly enter the market and expand the Select brand presence in the state of Colorado.”

BDS Analytics also published a recent report about the ingestible products market in the U.S. It claimed that “gummies are as popular as ever,” with 17 of the 20 most popular retail products sold during the initial four months of 2019 in California, Colorado and Oregon being – you guessed it – gummies. Sales of gummies soared to $115 million in all three states during the same window of time. So popular are these types of cannabis edibles that rival products like chocolate, tinctures, mints, and liquid and powdered beverages struggled to pull in even half of the amount gleaned by gummy sales.