Green Gold: Colorado Underestimated Marijuana Demand
A study on the Colorado marijuana market is providing economists and business professionals an inside look at the pot industry for the first time. Regulators in the Centennial State have released the brief for the Colorado Department of Revenue, which reveals a number of interesting items, including that Coloradans are consuming a lot more cannabis than was previously estimated. There is also a large market for tourists taking part. The study accounts for recreational and medical marijuana, giving an in-depth look at the total market activity for what may be the first time in history.
What is the major takeaway from the study? That folks in Colorado are consuming a lot of marijuana — 130 metric tons per year, actually. Of the state’s 5.36 million people, 485,000, or nine percent, are identified as regular adult marijuana users. While that doesn’t seem like an awful lot, the most frequent users are by far creating the most demand. Heavy users especially, or those who use cannabis on a daily or near-daily basis, have been the biggest drivers. According to the study’s numbers, the top 21.8 percent of the heaviest users account for 66.9 percent of the demand. In stark contrast, the lightest users — those that use marijuana less than once per month on average — make up roughly one-third of the entire user pool but only represents 0.3 percent of total demand.
As far as tourists and visitors are concerned, out-of-state customers are definitely bringing money into the state. There is an estimated 8.9 metric tons of demand for visitors alone, and the numbers are skewed between rural and urban environments. It’s estimated that 44 percent of retail sales in metro areas like Denver are made by out-of-state visitors, and a whopping 90 percent in the more rural mountain counties.
All of the data shows a large underestimate by regulators as to how big the demand would actually be for retail marijuana in the state, and most of that demand has been driven by the heaviest users, according to the study.
“This study finds total marijuana demand to be much larger than previously estimated. Our point estimate of demand is 121.4 tons per year for adult residents. This is 31 percent higher than a recent Department of Revenue assessment, 89 percent higher than a study by the Colorado Futures Center, and 111 percent higher than an older study by the Colorado Center for Law and Policy. The primary difference is caused by much heavier dosage amounts consumed by the state’s “heavy user” population — those who consume marijuana on a daily basis,” the study said.