Denver Officials Highlight How Marijuana Tax Revenue Has Supported Public Services Over The First 10 Years Of Legal Sales

A new annual report on marijuana industry trends published this week by Denver, Colorado officials showcases how the local government has distributed hundreds of millions of dollars in cannabis tax revenue to public initiatives such as homelessness services, affordable housing and education in the first 10 years of legal sales.

While marijuana sales and the resulting tax and fee revenue were down for the second consecutive year in 2023, the report also showed a continuation of another trend: illicit cannabis activity is declining, offering more evidence about the potential benefits of enacting a system of regulated sales.

Denver was the first city in the U.S. where adult-use retailers opened up in 2014 following voter approval of a statewide reform initiative on the ballot in 2012, so the new report is especially notable in that it covers the first decade of legal cannabis sales.

For residents wondering how the city is allocating tax revenue from those sales, the report breaks down where those dollars went in 2023:

• Homelessness Services: $7,950,350

• Affordable Housing: $7,533,272

• Malone Fund: $3,737,674

• Education: $3,320,871

• Regulation: $2,360,672

• Enforcement: $2,141,298

Via City of Denver.

Meanwhile, illicit cannabis activity has steadily declined as the city’s market has evolved, with marijuana-related offenses representing just 0.2 percent of crimes last year. Law enforcement seizures of illicit marijuana feel from 2,435 pounds in 2022 to 266 pounds last year. And that’s down from 9,504 pounds back in 2014 when legal sales launched.

Burglaries of cannabis businesses also dropped from 156 in 2022 to 98 in 2023, which the city says it at least partially attributable to regulations that were finalized in 2021 that require safe overnight storage of marijuana and cash.

“As we enter the second decade of legalization, Denver will continue to lead the nation in local marijuana regulation,” Mayor Mike Johnston (D) said in a letter included in the report. “As more of our national lawmakers consider proposals for national legalization, decriminalization and rescheduling of marijuana, Denver is standing by to share our lessons learned and recommendations in how the federal government can build on what Denver created.”

Via City of Denver.

“To understand where we must go to further our goals in cannabis equity, regulation, enforcement, and youth education and prevention, we must also understand the past,” he said. “We hope this report better informs people in Denver and across the nation of the work we are doing in the Mile High City to continue to lead the nation in cannabis regulation and to achieve the promise of legalization.”

Overall, revenue from cannabis taxes and licensing fees fell for a second consecutive year, reaching $48.1 million in 2023, compared to its peak of $72.6 million in 2021.

The report also shows that the number of cannabis licenses declined by seven percent from January 2023 to January 2024, with medical marijuana licenses accounting for the bulk of the decrease.

“The number of medical marijuana licenses fell 12 percent from 385 licenses in January 2023 to 340 licenses in January 2024,” the city said. “This is likely associated with the decline in medical marijuana sales, which are the lowest they have been since 2011.”

Meanwhile, last October Denver officials announced that the city achieved a marijuana milestone, with adult-use and medical cannabis tax revenue exceeding $500 million since 2010.

The city also formed a work group earlier this year to explore local regulations under a statewide psychedelics legalization law that’s now being actively implemented in Colorado.

In a recent podcast interview, Colorado’s top cannabis regulator looked back on the history of the state’s first-in-the-nation adult-use marijuana market, noting that she expects the lessons learned over the years will inform how her office approaches setting up Colorado’s new legal psychedelics program.

Separate from the Denver report, a statewide survey released in June found that rates of youth marijuana use in Colorado declined slightly in 2023—remaining significantly lower than before the state became one of the first in the U.S. to legalize cannabis for adults, contradicting prohibitionist arguments that the reform would lead to increased underage consumption.

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Photo courtesy of Philip Steffan.