Kansas City Fed Reports On Colorado Cannabis Market, Says Federal Illegality Continues To Create Banking Problems

The Federal Reserve Bank Of Kansas City recently published a report analyzing Colorado’s cannabis market and said the cannabis industry is going to maintain a growth tendency as long as public support for legalization spreads.

The Fed branch doesn't expect the market to grow at the rate seen in the early years of legalization. 

The report found signs of maturation in several aspects of the market over the last six years; including employment, taxes, licenses and sales data.

While the industry expanded amazingly in the first years after Colorado legalized adult use, there’s been a leveling off in sales, licenses and jobs created in the state’s cannabis market, the Kansas City Fed said. 

Tax revenue rose after Colorado legalized cannabis, helping fund public services and programs, but the Fed report said that revenue is expected to steady as sales plateau. 

Don’t miss out on the top cannabis stories of the day. Click here to sign up for our daily insider newsletter.

Another important conclusion: after an initial spike, rates of youth cannabis consumption have dropped below pre-legalization levels in Colorado.

Cannabis-related crimes have also dropped off, although therre are still signs of an illicit market operating in the state, the report said. 

“It is important to continue to highlight that Colorado’s legalization of marijuana, as well as that of other states as mentioned earlier in this article, conflicts with federal law,” the report's authors wrote. “This continues to create challenges for marijuana businesses, including access to the payment and banking systems.”

The lack of access to financial services for cannabis companies is one of the main issues the market must face as a whole in order to continue growing, the report said.

Photo from Pixabay.