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LEGALIZATION OUTCOMES
COLORADO TWO YEARS IN
PRESENTED BY
Adam Orens, Founding Partner
www.mjpolicygroup.com
Marijuana Policy Group
ABOUT
Leaders in economics, finance and policy
Market intelligence – policy design
Founded in 2014
Colorado MED cannabis economist
Experience in 12 states, 2 countries:
‒ Market sizing
‒ Demand estimation
‒ Market analytics
‒ Business modeling and planning
‒ Government consulting
2
3
OUTCOMES COVERED
Use prevalence
Demand
Medical vs. adult use
Pricing
Product mix
Economic impacts
Supply channels
4
PAST MONTH PREVALENCE —18+
6.5%7.3% 7.5% 7.8% 8.1%
9.2%9.8%
11.3% 11.0%10.4%
12.7%
14.9%
6.2% 6.1% 6.0% 6.0% 5.9% 6.0% 6.4% 6.8% 6.9% 7.1% 7.4%8.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Colorado U.S.
5
DEMAND
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2014 2015
Metr
ic T
on
s
Tourist
<1 days/mo.
1-5 days/mo.
6-10 days/mo.
11-15 days/mo.
16-20 days/mo.
21-25 days/mo.
26-31 days/mo.
Cohorts for Use Days per Month
130.3 total metric tons
147.8 total metric tons
4%
19%
62%
7%
7%
10%
65%
9%
6
MEDICAL VS. ADULTUSE
Medical – 6 percent growth
Adult Use – 88 percent growth
55.2%
41.0%
44.8%
59.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015
Adult Use
Medical
7
PRICING —FLOWER
$6.87 $5.61
$14.82
$10.25
$22.79
$9.98
$0
$5
$10
$15
$20
$25
$30
Medical $/Gram - CO Adult Use $/Gram - CO Recreational $/Gram - WA
8
PRODUCT MIX —MEDICAL
77.3%
14.1%
6.3%2.4%
73.1%
19.3%
6.4%1.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Flower Concentrate Infused Edible Infused NonEdible
2014 2015
9
PRODUCT MIX —ADULT USE
70.1%
11.6%14.7%
3.6%
67.0%
17.0%13.6%
2.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Flower Concentrate Infused Edible Infused NonEdible
2014 2015
10
ECONOMIC IMPACT
7,088 jobs 3,048 jobs 10,135 jobs+ =
+ =$996 Million
Total Impact
SecondaryImpact
Direct Impact
Manufacturing
Retail
Cultivation
Colorado Cannabis
Market
$1.39 Billion $2.39 Billion
11
0
20
40
60
80
100
120
140
160
2014 2015
Metr
ic T
on
s
Regulated Market - Medical
Regulated Market - Adult
Use
Unregulated Market
(Homegrows, Caregivers,
Grey Market, Black Market)
130.3 total metric tons
147.8total metric tons
26.5%
40.9%
32.6%
29.7%
42.7%
27.6%
ELEMENTS OF SUPPLY
Regulated market
12
SUMMARY
Prevalence and demand
Casual users
Prices
Concentrate sales
Strong economic impact
Regulated market serving nearly 75% of demand
13
DISCUSSION
Legalization
Prevalence, Users, Demand
Potency, product safety
Arrests, Incarceration costs, Illicit market
Social indicators - ???
Prohibition
Prevalence, users, demand
Illicit market prevails
Social Indicators - ???
Adam Orens
Founding Partner
Marijuana Policy Group
1999 Broadway Suite 2200
Denver, Colorado 80202
www.mjpolicygroup.com
