San Francisco (CNN Business) This time last year, it appeared that Colorado's industry was plateauing. Now it's surging.

Colorado cannabis shops notched sales of nearly $1.75 billion during 2019, setting a new annual sales record for the state home to the nation's longest-established recreational cannabis industry, according to Colorado Department of Revenue data first reported by the Denver Westword

The new high water mark for sales netted more than $302.4 million in tax revenue for the state's coffers, where that money is divvied up into various buckets to fund programs such as school construction, law enforcement, public health, drug education and public safety.

The 2019 figures showcase a surprising surge in growth from a market that a year ago appeared to be flattening out. Colorado's cannabis sales increased 13% from 2018, bouncing back from a 2.5% year-over-year growth rate from 2017 to 2018.

Those slow growth rates were largely driven by price drops on flower, or cannabis bud, Tom Adams, managing director at cannabis market research firm BDS Analytics, told CNN Business.

Read More