began to capture market share from the black market, as legal marijuana prices began to align with those prevailing in the illegal market.
Impact on Price A 2016 report248 indicates that, while sales volumes of legal marijuana in Colorado increased by 56.4% between 2014 and 2015, the value of these transactions increased by only 42.4% during the same period, indicating a fall in the unit price of the product. By way of an example, the average price of flowers249 marijuana declined 8.9% between 2014 and 2015. The report estimates that legal marijuana prices will fall at a rate of 7.4% per year, on average, up to 2020 [37]. The price per gram of marijuana in Washington State has fallen significantly but has fluctuated since legalization. Starting from a high of US$29 per gram in August 2014, the price plunged by 72% to US$8 per grams by July 2015. A slight recovery followed when prices rose to US$9 by April 2016 and then to US$10 in June 2016 [26,32]. Impact on Revenues and other Economic Variables According to a 2016 report250 by the Marijuana Policy Group, “because the industry is wholly confined within Colorado” marijuana-related spending, most of which transfer directly to the local workers and businesses, creates more output and employment per dollar than 90% of the industries in the state. This is so because of the small import component of the entire production, distribution and sale processes. [37]. It was indicated that over time the marijuana industry had matured and became organized, creating the need for more specialized services, including legal, consultancy and professional services that can fulfil industry specific demands. The Colorado experience has shown that although sales have increased significantly, increases in domestic consumption have been much more tamed, relative to the overall change. This outcome can be explained by the surge in visitor demand for the product. [37] Moreover, the marijuana industry was responsible for a surge in employment, adding approximately 18,000 full-time-equivalent jobs, 12,591 of which were directly involved in the marijuana industry [35]. Furthermore, the State’s marijuana-related revenues have been significant both in Colorado and Washington State. It was estimated that Colorado’s receipts from marijuana sales and excise taxes topped US$102 million in 2014-2015 fiscal year, the first fiscal period after legalization. This figure increased to US$156 million in the 2015–2016 fiscal year [38]. Likewise, according to the Washington State Liquor and Marijuana Board’s annual report for the 2017 fiscal year, in the 2015 fiscal year, the state collected US$ $65,688,345 in marijuana revenues251. By 2016 that figure surged to US$189,219,693, an increase of US$123,531,348 over the previous year’s total. Moreover, 2017 recorded the highest revenue intake since legalization (US$319,087,924), more than double the 2016 figure [39]. Cost of Implementation and Enforcement According to the Council on Responsible Marijuana Regulation, total marijuana taxes and fees in Colorado amounted to US$ 102,395,176 in the fiscal year 2014-2015 and $ 156,701,018 in the fiscal year 2015-2016. This indicates a net gain in both fiscal periods since to carry out its activities it cost The Marijuana Enforcement Division (MED)252, US$5,149,028 and US$8,064,469 in fiscal years 2014/2015 and 2015/2016, respectively [38]. Whereas the marijuana-related costs were not disaggregated, the total operating expenses for Washington State’s Liquor and Marijuana Board “The Economic Impact of Marijuana Legalization in Colorado.” Marijuana flowers are the hairy, sticky, crystal-covered bits that are harvested and dried to be used as medication [36] 250 “The Economic Impact of Marijuana Legalization in Colorado.” 251 Revenues include taxes, license fees and penalties. 252 The agency in charge of marijuana regulation enforcement in Colorado. 248 249
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