The Hotel Industry Is Making a Killing Off Marijuana Legalization, Study Finds
A new study found that Colorado’s hospitality industry can thank legal weed for making $130 million in revenue since the state first launched adult-use sales in 2014.
Published on March 10, 2020

In 2012, Denver Mayor Michael Hancock openly opposed recreational pot legalization in Colorado. He warned voters that the “perception that Denver is the marijuana capital” would “disproportionately harm” the Mile High City’s largest industry: tourism.

History has proven Hancock wrong.

A new study from the University of Pennsylvania found that Colorado’s hotels made $130 million in new revenues and saw a 9 percent increase in bookings shortly after launching legal adult-use cannabis sales in January 2014. The study’s author, John O'Neill, credited the spike in lodging expenditures — and Denver’s soaring economy — solely to legal weed.

"Although I studied Denver during a period of economic growth, its growth after legalizing recreational marijuana was above and beyond what would have been otherwise expected without legal recreational marijuana," he told "In addition, its growth was greater than comparable cities, such as Albuquerque, Austin, and Salt Lake City. Also, its growth was greater than national averages.”

However, the buzz wore off after about a year. Initially, hotels charged greater rates in 2014 due to increased demand — and let’s face it, given the hype around legalization, hotels could charge damn near whatever they wanted back then. But from 2015 onward, the average number of hotel reservations returned to their normal numbers, and rental rates fell back to their pre-2014 prices, as well. 

Additionally, how close a hotel was located to a pot shop didn’t matter. Tourists didn’t care how close dispensaries were to their lodging, probably because they wanted to visit as many dispensaries as possible. 

O’Neill plans to deliver his findings to state governments that are considering legalizing recreational weed. Areas with struggling tourism industries, or which could just use a financial boost, may find the data useful. He only looked at Denver since the capital has the most, and longest period, of weed legalization data. The same data trends may be found in other big cities such as Seattle, Portland, and Los Angeles shortly after their respective states legalized, too.

Cannabis hospitality is one industry that experts didn’t see exploding in popularity after legalization, but it’s been persistently successful as new weed-legal states come online. Overall, Colorado's tourism industry was worth $21 billion in 2017. By 2018, it was worth $22.3 billion.

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Randy Robinson
Based in Denver, Randy studied cannabinoid science while getting a degree in molecular biology at the University of Colorado. When not writing about cannabis, science, politics, or LGBT issues, they can be found exploring nature somewhere in the Rocky Mountains. Catch Randy on Twitter and Instagram @randieseljay
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