Exploring border town cannabis sales in CO & WA

Aug 17, 2021

As the cannabis industry matures, more US states are legalizing medical and adult-use access. More Americans now have the ability to purchase cannabis than ever before. At the time of writing, 15 states have legalized adult-use (aka 'recreational) access to cannabis, and only two still completely prohibit access to cannabis in any form.

Despite the recent acceleration in legalization, many people who wish to purchase cannabis are unable to because they live somewhere with restricted access to cannabis. Prohibition at the state-level is the most common culprit, but there are many municipalities and even entire counties within recreational states that have chosen to maintain the prohibition of cannabis. Would-be cannabis customers are not easily deterred by a lack of local access and often travel across city, county, and state borders to make purchases elsewhere. This trend should be a huge red flag to lawmakers who have chosen prohibition that these laws are not preventing cannabis access and they are also losing out on valuable tax revenue. Additionally, cross-border shoppers who have travelled long distances to make their purchases are more motivated to engage in looping purchase behaviors, which puts them and local businesses at risk.

Border counties with higher than average cannabis sales

Let's take a look at some examples of counties that are on state borders that receive a much higher than average amount of per capita cannabis sales. Per capita sales is a key metric for these analyses because it allows us to scale against the local population of each subject county.

We'll begin with Washington state. In the map below, we've labelled the three counties with the highest rates of per capita sales over the past year. Notice anything interesting about their locations? All three counties (Asotin, Spokane, and Whitman) share a border with Idaho. Idaho is one of the two remaining US states in which cannabis is still completely prohibited. Asotin County (labelled '1' in the map below)  has the highest per capita spend on cannabis than any other county in the state of Washington. In fact, the per capita spend in this rural county that borders both Idaho and Oregon is more than three times higher than the per capita cannabis spend of the average Washingtonian.

Next, let's look at Colorado. When we compare all counties in this state by per capita spend, two counties see much higher relative rates of cannabis sales than the others. These two counties are not at all close to each other, but they are both close to state borders. Sedgewick County (labelled 2 in the map below) borders Nebraska, and Las Animas County (labelled 1) borders New Mexico. Nebraska is the second US state that still fully prohibits cannabis, so cross-border shopping in Sedgwick county is no surprise. New Mexico's adult-use legalization law just went into effect, so it will be interesting to watch trends in Las Animas per capita sales over the next year. If fewer New Mexicans are crossing the border to shop for cannabis due to legalization in their home state, we should see the per capita sales rate in Las Animas county drop significantly in the coming months.

With evidence from two different markets, it is clear that border counties with recreational cannabis available tend to attract customers from other nearby areas. This should be a huge indicator to state, county, and local lawmakers that the continued prohibition of cannabis is largely futile; motivated customers will find a way to purchase elsewhere. Additionally, by forcing residents to shop out of state or county, these areas are losing out on significant tax revenue. It's time for these government bodies to get on board and realize that the tide of cannabis legalization is only moving forward.