Pubdate: Thu, 10 Jul 2014
Source: Denver Post (CO)
Copyright: 2014 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: John Ingold
Page: 4A

POT STUDY RELEASED

Medical Sales Outpace Retail; Demand Exceeds Estimates

A state-produced study has concluded that high taxes and fewer stores
are keeping Colorado medical-marijuana consumers from switching to the
recreational cannabis market, a trend that, if it continues, will have
a major impact on the state's predicted marijuana tax windfall.

The study, released Wednesday, found that out-of-state visitors make
up nearly half of recreational marijuana sales in the Denver area -
and 90 percent of recreational sales in mountain resort communities.
Tourists, though, account for only about 7 percent of the annual
demand for marijuana in the state, which the study estimates at 130.3
metric tons.

"This study finds total marijuana demand to be much larger than
previously estimated," the study's authors write in their report.

The reason, the authors conclude, is that previous studies have
underestimated the level of demand from heavy users. The new study
finds that the top 22 percent of marijuana users in Colorado account
for nearly 67 percent of the total demand. The bottom 54 percent of
users account for only about 4 percent of demand.

"(T)he prevalence of heavy users in Colorado is higher than the
national average," the authors write.

Overall, the study estimates that 487,000 people over 21 years old in
Colorado, or about 9 percent of the state's population, use marijuana
at least once per month.

"The department feels it is important to understand marijuana usage
and the demand in the state to effectively manage production within
the regulated industry," Colorado Department of Revenue executive
Director Barbara Brohl said in a statement.

The Marijuana Enforcement Division said it used survey results,
demographic data, research literature and "Colorado-specific primary
source data" to compile the study.

Among the most significant conclusions listed in the report: Few
people are switching from shopping at medical-marijuana dispensaries
to shopping at recreational marijuana stores. The study concludes that
could be because higher taxes for recreational marijuana and fewer
available outlets discourage switching.

"(T)he retail demand is derived primarily from out-of-state visitors
and from consumers who previously purchased from the Colorado black
and gray markets," the study's authors write.

The trend, though, has major implications for the state's marijuana
tax revenue.

Predictions for revenue from recreational marijuana taxes once reached
as high as $35 million for the first six months of 2014. Instead,
including numbers released Wednesday for May tax collections, the
state has brought in only about $14.7 million so far.

Medical-marijuana sales, meanwhile, continue to outpace recreational
sales. Through May, medical-marijuana dispensaries had done nearly
$165 million of sales - compared with the $90 million from
recreational stores. Tax revenue from medical-marijuana sales, though,
has amounted to slightly less than $5 million.

"Creating a system where people who are using cannabis medically can
access their medicine without paying higher taxes is not a bad thing,"
said Taylor West, a spokeswoman for the National Cannabis Industry
Association.
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MAP posted-by: Matt