Will Colorado’s True Marijuana Usage Rate Please Stand Up

July 18, 2015

In my most recent post I looked at a study conducted by the Denver-based Marijuana Policy Group (MPG). They produced an estimate of the number of users in Colorado and an estimate of the total metric tons consumed in Colorado. I used their metric tons estimate to take a stab at the size of the marijuana market in Colorado. My estimate based on 130.3 metric tons consumed is $1.125 Billion for 2014.

As part of the MPG report, which you can download here, an estimate of the total number of marijuana users in Colorado is produced. MPG’s estimate includes an under-reporting bias adjustment (22% for infrequent users and 11% for heavy users) based on a similar study conducted by the RAND Corporation. MPG’s final Colorado user estimate is 485k monthly users and 686k yearly users (rounded to nearest thousand). The population of Colorado residents 21 years of age or older is 3.7 million (rounded and based on Census figure of 3,677,243,243 for 2013). This translates into a Colorado marijuana usage rate of approximately 13.1% for monthly users and 18.5% for yearly users.

These figures and the under reporting adjustment have a basis in the research literature but in reading both reports I began to wonder if there might be a better way.

It occurs to me that one possibility for determining the Colorado marijuana user population is to survey residents asking them what portion of the population they believe uses marijuana. This allows respondents to make an estimate without concern about how the information might be used against them in the future. So I decided to run a Google Survey asking respondents to estimate % use of marijuana in their community.

You can look into the details by following this link to my survey results.

I posed only one question:

“What percentage of people in your community use marijuana? Select an estimate between 0% and 100%.”

Here’s a link to view the question as a respondent.

Obviously the survey question has drawbacks. The most obvious is the word “community”. What does that mean? I like it because it allows the respondent to define the word on their own terms. Hopefully respondents were thinking about people they know well enough to have a pretty good idea whether they use marijuana or not. I doubt this would fly in the academic peer-review world. But that’s the beauty of blogging.

Drawbacks aside, my survey respondents believe, on average, the Colorado marijuana usage rate is 41%. Quite a bit higher than the RAND and MPG estimates.

Here are some other findings:

Women estimate higher usage than men.

Younger people estimate higher usage than older people. Duh.

Lower income people estimate higher usage than higher income people. Note there were only 24 respondents with inferred incomes greater than $100,000, not a sufficient number to produce a reliable estimate.

City dwellers estimate higher usage than suburban and rural residents. I expected a larger gap.

Interesting results. If true, this would mean:

• There are approximately 1.5 million marijuana users in Colorado.
• The marijuana market in Colorado is approximately $2.5 Billion.
• Legal sales represent only ~28% of the total market.
• The black market is huge with ~$1.8 Billion in annual tax free sales.
• Colorado is losing around $400-500 Million in annual tax revenue.
• If all potential marijuana tax revenue was collected the amount would be in the same ballpark as total Corporate net income taxes collected in Colorado in 2013.

Wow.

What do you think?

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