Colorado Rakes In $2 Million in Retail Pot Taxes for January
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Colorado’s legalization of marijuana is resulting in a profit high. In just the month of January alone, the state has pulled in $2 million in taxes related to the sale of recreational marijuana, in addition to another $1.5 million from taxes on sales from medicinal marijuana. More than $14 million worth of retail recreational marijuana was sold throughout the month. Based on current trends, Colorado can expect to make an additional $40 million in revenue from pot sales in 2014.
Marijuana users in Colorado have been required to pay high taxes in order to use the drug legally. There is a 10% sales tax on all retail marijuana in the state, in addition to the 2.9% sales tax that already exists in Colorado. The state also imposes a “retail marijuana excise tax” of 15%, but this isn’t directly charged to the consumer; it’s added on the first sale or transfer of marijuana from a retail marijuana cultivation facility. The excise tax is calculated by taking the average market rate per pound and multiplying it by the weight of the flower times the tax rate.
State officials are now left to ponder what to do with the extra money. Voters approved a law last year that requires the first $40 million collected from the special excise taxes to be directed towards school construction, which means the money will go directly into that for roughly the next 18 months. Gov. John Hickenlooper has proposed using the additional revenue afterwards to promote substance abuse treatment and anti-drug campaigns geared towards young people, as well as the current campaign to discourage users from driving while high.
Meanwhile, a Republican lawmaker has launched a “No Welfare For Weed” bill after reports that EBT withdrawals were being made at ATM’s inside of legal Colorado pot shops. Approximately 62 EBT withdrawals were made at these establishments last January, but it’s a fraction of the more than 42,000 EBT withdrawals made throughout the state that month.