The numbers are in, and Colorado has reportedly earned a whopping $2.4 million from recreational marijuana tax revenue for the month of January. An additional $1.4 million in taxes was raised from the medical marijuana market. Experts predict that, if these trends continue, Colorado can expect up to $40 million by the end of the year, purely from marijuana tax revenues.
The Colorado Department of Revenue has released information showing that $14 million worth of pot was sold in Colorado this January, the first month of the state’s great legalization experiment. It is likely, however, that these numbers are a slightly skewed prediction of what’s to come for Colorado’s cannabis industry. This is because many cannabusinesses were still in start-up mode, and those that had opened experienced a predictable rush of customers from around the state (and nation, and probably the world) wanting to be among the first to pay for fully regulated and legalized weed.
“This is revenue directly out of the hands of cartels,” said Brian Vicente, a Denver attorney who helped pass the law. “These tax numbers will probably grow over time, but since it’s a new market, will have to wait and see.”
Marijuana sales in Colorado currently undergo three separate taxes from seed to sale, with sales tax rates reportedly as high as 21.12% in some places in the state capitol. In addition to the sales taxes, there is also a “retail marijuana excise tax” of 15% across the entire state. This tax applies on the first sale or transfer of marijuana from wherever it was grown and processed to wherever it might be going next, and while the cost of the tax can be included in the product pricing at retail establishments, legal pot sellers are not allowed to label the spike in price as a consumer tax: it is a tax on the industry itself.
Despite the severe and many-tiered taxation system in place, consumers and producers alike have been relatively quiet on the issue. People don’t seem to mind paying the extra price for legalized access, and the state of Colorado is already making plans on how to spend its first year’s worth of marijuana tax money. The legalization of marijuana in Colorado came with an original restriction that the first $40 million in tax revenue must go toward school construction, but beyond that Gov. John Hickenlooper has proposed using the money to advance marijuana-related programs, such as funding efforts to keep children away from drugs, educating the public about the general dangers of substance abuse, and a now-quite-relevant, state-wide campaign against stoned driving.
If the office of Gov. Hickenlooper’s predictions are accurate, Colorado can expect a grand total of $188 million in marijuana tax revenue over the fiscal year, which begins this July.
Sources:
http://www.thedailychronic.net/2014/27829/colorado-raises-2-1-million-recreational-marijuana-taxes/
Photo Credit: Jonathan Piccolo
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