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Colorado’s legal marijuana industry generated nearly $1 billion in retail sales during 2015, according to numbers released by the state in February.

Marijuana MoneyThe Colorado Department of Revenue, which collects state taxes, reported that cannabis sales, both recreational and medical, came in at about $996 million, a record for the industry and a 42 percent increase from 2014.

August saw a record monthly haul of more than $100 million. But the market fell just short of expectations for the year, which predicted annual revenue above $1 billion.

Retail sales outpaced medical sales

Still, the report marks a milestone for the state and for the legal pot industry. And for the first time, recreational sales outpaced medical sales. Customers paid $587 million for recreational marijuana and $408 million for medical cannabis.

That’s an 88 percent increase in recreational sales from 2014, while medical marijuana sales increased by just 5.8 percent. Legal recreational cannabis first went on sale in January of that year.

The sales numbers weren’t the only good news for Colorado and marijuana users. The state drew $135 million in sales taxes, excise taxes, and licensing fees. At least $35 million will go toward school construction projects, and other money will pay for drug education, addiction treatment, and police.

Other states looking at legalization should find motivation in the data from Colorado. Legal cannabis wouldn’t make up for big holes in state budgets, but taxes could relieve the high cost of the public school system. And because the taxes affect only users and marijuana businesses, they’re appealing to lawmakers and voters.

More legalization likely in 2016

Voters in California, Nevada, Massachusetts, Maine, and Arizona are likely to vote on legalization in November. Ohio, Vermont, New York, and other states could join them.

The outlook for legalization in these places is complicated, however. Not every aspect of reform in Colorado has been rosy, and other states may see obstacles in the state’s experience.

For one thing, local communities in Colorado can ban pot shops, so residents are faced with a patchwork of conflicting laws across the state. What is legal in one county may not be legal in the next.

Conflicting local laws

marijuana leafCalifornia already faces this problem in its medical marijuana program. Hundreds of local governments have banned dispensaries and cultivation, fearful of full legalization. It could prove hard for other states to prevent these bans.

Lawmakers outside Colorado might also fear edibles, which have raised concerns in that state. Labeling and portioning problems have led to new regulations, but worries that edibles will appeal to children could give other states pause.

Banking issues also pose difficult choices for lawmakers. Almost all U.S. banks refuse to serve marijuana business because the drug is prohibited under federal law. That forces pot shops to do business only in cash – and that in turn puts farmers, drivers, and retailers at risk of violence.

These issues may not be enough to stop legalization in every state, but they could lead to a few defeats on Election Day. The view from Colorado is mostly good, but the road to nationwide reform will be bumpy.

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About the Author: Matt Brooks

Matt is a journalist from San Francisco who has specialized in marijuana policy for more than six years.

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