An Analysis of the Recreational Marijuana Industry in Colorado

Since 2014, the legal marijuana industry has flourished in Colorado, the first state to ever legalize its recreational use in the United States. It is necessary to fully understand the economic impact of the implementation of the recreational system as well as the characteristics of the market for lawmakers, business owners, and voters to make educated decisions on future legislation. This report will delve into these matters in an objective manner to provide all the stakeholders in any present or future recreational marijuana market (users, business owners, legislators) with accurate information on the current state of the industry. Starting with an introduction of the history of marijuana in the United States, as well as the factors that led to its illegality, offers insight into the past and current laws currently impacting the recreational marijuana market in Colorado, with special emphasis on the state regulatory framework in place at this time. The analysis will include an in-depth examination of the current market forces at play in the recreational marijuana market, including technological, sociological, and economic factors, with a look at current business-level strategies for marijuana businesses and the threats arising from alcohol and tobacco, the drug's main substitutes. This report will explain the tax framework in place in Colorado, and investigate trends in market sales and tax revenues, including detailed statistics on the distribution of tax revenue throughout the state. A comprehensive analysis of the legislative issues the market faces, both in Colorado and across the country, will thoroughly indicate the major problems the industry must overcome in the future, or whether it can do so at all. These will include difficulties in the banking, taxation, insurance, and bankruptcy systems that marijuana-related businesses currently face.