As the spread of legalization accelerates, we are starting to see some truly healthy and robust state-level recreational cannabis markets.
Colorado, California, and Nevada all recently reported record-breaking sales.
And that’s just what’s going on now. The future looks even brighter.
After all, Michigan’s voters just legalized recreational-use marijuana… and Massachusetts kicked off its recreational sales just last week.
With all these taxable sales, these states are seeing considerable tax revenue – or will very soon.
Meanwhile, sales are rising for top cannabis companies – and the gains are stacking up for investors who got in early…
Companies and Governments from Coast to Coast Are Seeing Windfalls
Some of these numbers are every bit as incredible as I predicted.
Colorado, for example, reached $1 billion in sales as of August 2018.
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According to a report from the Colorado Department of Revenue and its Marijuana Enforcement Division, tax revenue from those sales came in at $200 million.
With those numbers, Colorado is solidly on pace to break last year’s record of $1.5 billion in marijuana sales.
So why the uptick in sales? More people are entering the market, proving that the stereotype of the average cannabis user – young and male – is old news. Women and older people are beginning to buy, drawn in by the cannabis options containing cannabidiols (CBDs), the non-psychoactive marijuana compounds good for relaxation and pain management.
California sales are also off to a great start. In the first quarter, the Golden State raised $60.9 million in taxes alone. That’s twice the tax revenue Nevada raked in in twice the time.
Of course, California’s market is much bigger, but that state faces the obstacle of a tax-free black market. The state currently has three different taxes on marijuana, which means an additional 38% for the consumer.
Despite this hiccup, the state’s legal cannabis boosters remain hopeful. In the third quarter, state tax revenue on cannabis is up by $13 million, totaling $93.1 million for the quarter.
As for Nevada, its sales have blown predictions out of the water and don’t show any signs of stopping. In that state’s first year, dispensaries have sold upward of $500 million in product, earning Nevada $70 million in tax revenue.
And last week, Massachusetts finally kicked off recreational sales in two dispensaries – NETA in Northampton and Cultivate in Leicester – nearly two years after voters passed a legalization ballot referendum.
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While numbers haven’t been reported, customers reportedly waited in two-hour-plus long lines to get through the doors and make history.
It’s still too early to tell how Massachusetts sales will do, with only two stores open and a handful more racing to catch up, but things look beyond promising for the weeks and months ahead.
With markets showing real signs of slowing down, the cannabis sector remains a rare bright spot.
If you’ve been on the sidelines – for whatever reason – now’s the time to strike. As my colleague Greg Miller here at the National Institute for Cannabis Investors says, the incredible summertime gains realized in pot stocks were really just the start, not the end, of an incredible run. These sales numbers go a long way toward proving that theory out.
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