Dive Brief:

• Sales in Colorado of legal marijuana by licensed and regulated retail stores and medical marijuana dispensaries were $996,184,788 in 2015, according to the Colorado Department of Revenue.

• Retailers in the state have been able to legally sell recreational marijuana since Jan. 1, 2014, though not all municipalities there have legalized it. The sales last year have resulted in a windfall of more than $135 million in taxes and fees to the state. 

• Colorado retailers and dispensaries saw $699 million in sales of cannabis in 2014, but in 2015 more shops opened, more towns allowed such sales, and more users moved from the black market to regulated stores, according to the Denver Post’s “Cannabist” report.

Dive Insight:

While some experts predicted little movement from the black market to higher-priced recreational stores because of higher taxes and low-risk possession laws, many users may find the idea of purity and legality is worth the extra money, as many indeed in Colorado have made the switch.

“It’s remarkable that less than seven years ago, all of that money was being spent in the underground market,” Mason Tvert, the Marijuana Policy Project’s communications director, told the Post. “Clearly there’s a large demand for marijuana, and we’re now seeing that demand being met by legitimate businesses that are answering to authorities instead of criminals who answer to nobody.”

The lucrative retail market could accelerate as towns increasingly find it difficult to eschew a source of much-needed tax funds.

Marijuana retailers still face many obstacles, not least those presented by the federal government, which still considers such sales illegal. That in turn makes it difficult for retailers to access many banking services, which forces them to operate cash-only. 

Still, approaching a billion dollars in sales is nothing to sneeze at, although Quartz magazine notes that it still pales to sales of alcohol or even mustard, although that is in all 50 states in the U.S.