CANNAINVESTOR Magazine Premier Issue April/May 2016 | Page 50

The leader in cannabis business
intelligence and market share tracking
Colorado and Washington State Cannabis Sales Set the Tone for Rapid Growth
March 31, 2016—The na1on’s first two legal cannabis markets, Colorado and Washington state, began
adult-use (non-medical) sales in 2014. Consumers responded enthusias1cally, with Colorado grossing $305
million and Washington $134 million in their respec1ve first twelve months, according to Boulder, CObased BDS Analy1cs’ GreenEdge™ retail sales tracking technology. Colorado sales began Jan. 1 and
Washington started in July. Early on, Washington’s grow opera1ons, which legally must have separate
ownership from retailers, received state cer1fica1on too late to produce quan11es sufficient to meet
demand. Prices spiked and sales started slowly—Washington’s first-month sales of $1.5 million were
dwarfed by Colorado’s $14.7 million.
Washington sales grew quickly from that small start, adding 28.4% on a compounded monthly basis
through June 2015. But from June to December last year, that rate slowed to 7.6% per month. Oregon
began selling adult-use cannabis in the fall and likely pulled some of its border-hopping customers back
from Washington. And of course exponen1al growth is not sustainable beyond a limited ini1al period. But
the state’s cannabis sales will con1nue to grow at more modest rates. S1ll, Washington’s adult-use sales
are less than two-thirds of Colorado’s. In the final six months of 2015, sales totals were $215 million to
$323 million, respec1vely. In all of 2015 Colorado dominated adult-use retail sales with $588 million to
Washington’s 318 million.
Average selling price (ASP) at retail dropped steadily in Washington beginning in September 2014, soon
a^er legaliza1on. By contrast, Colorado’s prices rose slightly over 1me a^er early fluctua1ons. In Colorado’s
second quarter of sales, ASP averaged $9.90 per gram or unit (depending on the product). By Q4 2015, that
average rose to $12.33. Washington’s 1ght supply pushed its ASP up to $15.48 in its second quarter of
sales, but prices fell below Colorado’s average in March 2015 and reached $9.31 in Q4.
A shi^ in Washington’s marijuana tax policy is partly responsible for these ASP changes. Effec1ve July 2015,
the state ceased taxing wholesale suppliers’ transfers to retailers and shi^ed the burden to retail customers
as a sales tax. BDS Analy1cs reports the pre-sales-tax price of products sold at retail. Previously, the
wholesale excise tax was reflected in the retail price paid by the consumer, but with the tax shi^ing to a
more tradi1onal sales tax, that is no longer the case.

Sales and Average Selling Prices (ASPs)

Sales

Colorado and Washington, adult-use monthly retail revenue, 2014-2015

$60 million

CO Sales

$40 million

CO ASP

$25.00
$20.00

WA ASP

ASP

WA Sales

$15.00
$10.00

$20 million

$5.00
$0 million

$0.00

©2016 BDS Analy1cs Source: