Legal Cannabis At Five: Colorado's Maturing Market Demonstrates Impacts & Opportunities – Benzinga

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By John Kagia, Chief Knowledge Officer, New Frontier Data

As a new wave of states from Illinois to Missouri face their advent of newly legal cannabis, New Frontier Data’s analysis of Colorado’s first years of legal cannabis offers insights about the country’s most established adult-use market, as a guide for expectations as mores states adopt policy reforms.

When given a (good) choice, consumers will go legal. With over $6 billion in sales throughout its market’s first five years (2014-2018), consumers have flocked to Colorado, attracted by competitive prices, expansive options of regulated products, and widespread access in major population centers. Indeed, New Frontier Data estimates that over 80% of all cannabis demand in the state is now being served by the legal market. As such, further growth from consumers transitioning from the remaining unregulated/illicit market to the state-regulated industry will be incremental in the coming years. Its success in getting consumers to embrace its legal market is a hallmark achievement of Colorado’s efforts to disrupt the illicit market and affirms that consumers will opt for legitimacy when products are price-competitive and comparatively convenient.

The industry’s growth is in the adult-use market. Also notable about the numbers is how quickly adult-use sales eclipsed the medical market. By the end of their second year, Colorado’s adult-use sales had already climbed 40% higher than sales in its long-established medical market. The dramatic difference in the respective growth rates between the medical and adult-use markets underscores the value of medical licenses in those states still debating or formulating adult-use legalization. As seen in Colorado, the medical license holders who were operational when the state fully legalized were well-positioned to lead the adult-use market, with many leveraging themselves to become the largest operators in

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