The hotel trade in Denver saw revenue shoot up by $130 million after Colorado decided to legalize recreational marijuana in 2014, according to a new study.

John O’Neill, professor of hospitality management at Penn State University, used data from travel research firm STR to conduct the research. He then used the geo-coordinates and opening dates of recreational marijuana dispensaries in the Denver area to gauge the economic benefit that legalization brought.

O’Neill revealed that occupied hotel rooms increased 9% in Denver during 2014. He admitted that the city was enjoying a period of economic growth at the time, but he said the boost it enjoyed post-legalization went “above and beyond” the growth in comparable cities like Albuquerque, Austin, and Salt Lake City.

“We found that Denver hotels were able to charge and receive higher prices for hotel rooms following recreational marijuana legalization, and also found increased visitation to the Denver area with growth in occupied hotel rooms of 9% in 2014, higher than any other year we studied, resulting in positive economic impact,” said O’Neill.

Colorado and Washington were the first two states to legalize adult-use cannabis and Denver quickly emerged as a major marijuana tourism destination. O’Neill believes his findings could be useful to any other states that are mulling over legalization proposals.

Eleven states and the District of Columbia have now legalized recreational marijuana, but many more are considering it. O’Neill believes many more cities would enjoy a tourism boost if they followed suit.

He believes that tourists may only visit a marijuana dispensary once or twice, but that hotels, restaurants and conventional retailers will all benefit from the increased footfall.

However, he warned that the economic boost only lasted for a year, which suggests that tourism bosses must do more to capitalize on the increased interest that cities with newly legal marijuana industries enjoy.

Colorado’s combined recreational and medical marijuana sales reached a record $1.75 billion in 2019. That is an increase of 13% on 2018, according to data from the Department of Revenue’s Marijuana Enforcement Division.

It yielded $302 million in tax revenue for the state in 2019. Cannabis sales have now reached a total of $7.8 billion in the six years since legalization.

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