Published on: 06/7/16
On the 7th of November 2000 Amendment 20 to the constitution of the state of Colorado was approved by 54% of voters, and the door was opened to the use of Cannabis for purely medical purposes – a ground breaking initiative at the time. This was followed up in November 2012 by another piece of landmark legislation in the enactment of Amendment 64, which made the possession of Cannabis for recreational purposes legal for adults over the age of 21.
Growth of the Cannabis industry in Denver since inception
Today a little over 15 years have passed since Amendment 20 was adopted, and in Denver, Colorado’s capital and most populous city, CannaBusiness has become a legitimate industry in itself with a current total of 1 046 medical and recreational licenses, and has produced a turnover slightly in excess of a cool billion Dollars in 2015, according to data recently published in an article by the Denver Post.
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Revenue from recreational retail sales eclipse that of Medical Cannabis
Since the introduction of retail sales of Cannabis for recreation use in 2012, revenue has mushroomed and 2015 saw the financial return of the medical Cannabis industry including sales of all extracts and preparations of Cannabis such as Cannabis oil, Cannabis extracts, High CBD Hemp oil and other medical edibles – altogether worth around $408 million – being surpassed by recreational sales which hit a high of $588 million over the same period.
Why are recreational sales so high in comparison to medical Cannabis sales?
In the early days of medical Cannabis usage, much concern was directed at the potential for the “diversion” of medical Cannabis to the then illegal underground recreational market. While this was seen as a problem by the anti-legalization brigade, it remains a valid argument that the line between medical and recreational use is a difficult one to define.
Self-medication is officially seen as recreational usage as it involves no oversight or certification by medical authority, however it is easy to understand that in a climate of recreational legality, medical certification would be seen by users to be tantamount to obtaining a doctor’s permission to take an aspirin for a headache. Why subject oneself to the rigorous processes of applying for certification to use medical Cannabis for pain, sleep disorders, nausea or lack of appetite when one can walk into a shop and purchase what you require over the counter, no questions asked?
This situation skews the statistics, and begs the question of whether the line of demarcation between the two types of usage has blurred into irrelevance in Denver – and could also provide some explanation for why medical purchases have been so rapidly overhauled by recreational demand.
Will the recent capping of grow and retail licenses impact on revenue growth?
In Denver a closely contested council vote of 7 to 5 has introduced a cap on the quantity of licenses of both kinds in the city, as reported by the Denver Post, a measure that has been designed to limit the seemingly uncontrolled spread of CannaBusiness within the city limits.
In the face of growing sectors of the recreational Cannabis industry such as Cannabis tourism, which provides a stream on income from out of state visitors, as well as an increasing interest in self-medication, it is doubtful whether this measure will have any impact on the phenomenal increase in revenue produced by CannaBusiness – which shows all of the hallmarks of remaining a growth industry for the foreseeable future.
Disclaimer: Views expressed here do not necessarily reflect those of Endoca and its staff. This article is not intended to provide medical advice, diagnosis, treatment or cure. Endoca CBD products have not been approved by the US Food and Drug Administration (FDA).