Voters in Colorado approved adult-use cannabis legalization on Election Day 2012. Colorado was joined by Washington State as the first states in the U.S. to adopt recreational cannabis legalization measures.
Colorado ended up beating Washington State when it came to being the first to launch regulated adult-use cannabis sales, and Colorado will forever hold the title of being the first state in the nation to allow recreational cannabis sales. The first recreational cannabis sale occurred in Colorado on January 1st, 2014.
Since 2014, Colorado’s emerging legal cannabis industry has sold a considerable amount of cannabis products and generated a lot of tax revenue in the process. The state’s legal cannabis industry recently passed a major milestone, having crossed the $3 billion total tax revenue mark.
“Marijuana sales have raised over $3 billion in tax and fee revenue according to Colorado Department of Revenue (DOR) data.” stated the Colorado Department of Revenue in a press release this week. “In its monthly marijuana sales and tax revenue report, Department of Revenue figures show that tax revenue since legalization reached $3,012,831,657 after sales in July generated $20,354,753.”
“Tax revenue comes from the state sales tax (2.9%) on marijuana sold in stores, the state retail marijuana sales tax (15%), and the state retail marijuana excise tax (15%) on wholesale sales/transfers of retail marijuana. Marijuana license and application fees generate the fee revenue.” the press release also stated.
Below is a table containing historical legal cannabis sales totals from the Colorado Department of Revenue:
As you can see, Colorado’s annual legal cannabis sales peaked in 2021 and have since deflated a bit, which is a common trend for states that were the among the first to launch adult-use cannabis sales. Washington State’s legal cannabis industry has also experienced a similar trend in sales.
“The cannabis market in Colorado has shown a consistent pattern of growth and pricing adjustments over recent months. In July 2025, Colorado reported total cannabis sales of approximately $99.72 million, with an average item price of $14.20, reflecting a month-over-month sales growth of 3.8% and a unit growth of 2.7%.” states cannabis industry data platform Headset about Colorado’s cannabis market.
“Despite these positive short-term trends, the year-over-year sales and unit growth rates have declined by 8.4% and 5.7% respectively, indicating some challenges in maintaining longer-term momentum.” Headset also wrote.
In addition to tax revenues generated from legal cannabis sales in Colorado, the state has also benefitted from cost savings associated with no longer enforcing cannabis prohibition against consumers. While the tax revenues and cost savings will not fix every economic problem facing Colorado’s government, they still help fill in many budget gaps, and that is always worth celebrating.