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Colo. Earns $3.5 Million in Marijuana Taxes

By Jeralyn, Section Colorado News
Posted on Mon Mar 10, 2014 at 09:47:22 PM EST
Tags: marijuana reform (all tags)
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The Colorado Department of Revenue released the January, 2014 sales tax figures for marijuana today.

The state took in $2.9 million in sales and excise taxes and another $600,000 in licensing fees, for a total of $3.5 million.

The state distributed $2.1 million of the sales tax to county and local governments. Denver received the lion's share. The actual numbers are here. [More...]

  • 15 percent excise tax: $195,318.
  • 10 percent excise tax: $1,401,568.
  • 2.9 percent retail marijuana sales tax: $416,690.
  • Medical marijuana fees: $496,361.
  • 2.9 percent medical marij. sales tax: $913,519.
  • Retail marijuana fees: $96,300.
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    Colo. Earns $3.5 Million in Marijuana Taxes | 38 comments (38 topical)

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    Been watching "Weeds" (4.00 / 0) (#11)
    by Amiss on Wed Mar 12, 2014 at 01:09:34 PM EST
    on CNN. I don't know, but they were buying medical pot, and were having to be a resident. If so, they are reporting selling out of state?

    afaiu... (5.00 / 1) (#12)
    by kdog on Wed Mar 12, 2014 at 02:59:26 PM EST
    they can't sell out of state, but a lot of people from out if state came to CO to buy their first bag of legal recreational reefer plus tax.

    I predict that novelty will wear off quickly, and residents of neighboring states will go back to their local black market sources.  Tax collections will probably come down from the January numbers.

    And disgruntled prohibitionists should be thrilled by this, that'll show that usage isn't skyrocketing just because it's legal, like worry-warts have always feared would happen with legalization.    

    Parent

    I am surprised a business model that was so recent (2.00 / 1) (#1)
    by oculus on Tue Mar 11, 2014 at 12:13:24 AM EST
    illegal is now so law-abiding re paying taxes.

    the medical marijuana businesses (none / 0) (#2)
    by Jeralyn on Tue Mar 11, 2014 at 03:07:09 AM EST
    have been paying sales taxes in Colorado for some time. It's just the recreational sales that are new. Since recreational licenses are limited to existing medical marijuana businesses (this will continue until late in 2014 if I remember correctly), the businesses are quite familiar with filing tax returns.

    Parent
    The Gov projected tax revenues of (none / 0) (#3)
    by leftwig on Tue Mar 11, 2014 at 09:58:22 AM EST
    $133M+ in the first year ($11M+ a month).  He also stated that they would use $85M of those revenues in the first two years to cover youth prevention education and addiction treatment.

    I imagine sales will pick up, but given the month of Jan. numbers, the tax revenue generated will just about cover youth prevention and addiction treatment costs.

    From the story (none / 0) (#5)
    by Yman on Tue Mar 11, 2014 at 07:41:41 PM EST
    The state says 59 businesses filed a return for the Department of Revenue's report. The state's initial projections were based on assumptions about 40 businesses, however only 24 were actually approved to operate on Jan. 1.

    "The first month of sales for recreational marijuana fell in line with expectations," said Department of Revenue Executive Director Barbara Brohl said in a statement. "We expect clear revenue patterns will emerge by April and plan to incorporate this data into future forecasts."



    Parent
    Clearly their "expectations" before (none / 0) (#6)
    by leftwig on Wed Mar 12, 2014 at 07:33:20 AM EST
    legalization occurred and after actually receiving tax receipts are different.  They actually say that in the quote provided with the excuse that not as many businesses were operable as expected.

    The numbers could very well change as time passes, but Jan. receipts were not close to what was projected.

    Parent

    Clearly they gave no ... (none / 0) (#7)
    by Yman on Wed Mar 12, 2014 at 07:49:41 AM EST
    ... projection for January, and using a monthly average of the annual projection is misleading, given that businesses were just getting started in that first month.

    Parent
    As menmtioned by Jeralyn, most of these (none / 0) (#8)
    by leftwig on Wed Mar 12, 2014 at 08:32:47 AM EST
    businesses were already established as they had been selling medical marijuana for years.  

    From a business model perspective, I could make an argument either way on Jan sales (that it should have been one of the best months or that it would require time to ramp up).  Making a statement either way would be premature, but assuming it to be "average", then projections were off significantly.

    Parent

    Just had a chance to look at some (none / 0) (#10)
    by leftwig on Wed Mar 12, 2014 at 09:46:46 AM EST
    figures.  Retail sales were $14M for Jan with an article from HuffPo stating that the first week netted almost $5M, so sales dropped fairly significantly from the first week.  Retail sales have been projected to be $610M for fiscal year 2015 which would require sales of $50M per month.  Add in that Bloomberg's article mentioned half of the sales went to non-residents, my guess would be that monthly numbers aren't likely to pick up much.

    Parent
    And therefore? (none / 0) (#28)
    by Dadler on Thu Mar 13, 2014 at 11:30:13 AM EST
    What is your point? It seems quite, um, LOGICAL, that trying to estimate these numbers is a dice roll. You do realize, I would hope, that a certain number of people they factored are going to stick with their dealers simply because they don't want the government to know they toke. This will always be the problem you face with legalization. And it is not the fault of users, it is ENTIRELY the fault of an irrational government runk amok with corrupt cash in their pockets.

    Parent
    I thought my points were obvious. (none / 0) (#29)
    by leftwig on Thu Mar 13, 2014 at 01:59:09 PM EST
    Sales and tax revenues aren't close to estimates so far.  ITs a small sample, but given that sales were much higher at the beginning of the month than the end of the month and that more than half of the sales were to out of staters, the prognosis for future growth isn't great.  The governor proposed spending on two new programs that he thought were necessary given legalization, youth prevention and addiction treatment.  IF sales don't pick up from January and these new programs are implemented, the net affect will be a wash on the state making any money off pot sales.  

    I've got no issues with legalization (of all drugs) assuming employers may drug test and base hiring/firing practices on use as they see fit and that public assistance be denied to users.  I was always skeptical that the reason to support legalization should be based on a financial windfall.  

    Parent

    That's not what she said (none / 0) (#16)
    by Yman on Wed Mar 12, 2014 at 06:10:46 PM EST
    More importantly, from the article:

    The state says 59 businesses filed a return for the Department of Revenue's report. The state's initial projections were based on assumptions about 40 businesses, however only 24 were actually approved to operate on Jan. 1.


    Parent
    Bloomberg link (none / 0) (#4)
    by ragebot on Tue Mar 11, 2014 at 10:13:54 AM EST
    has additional information.  Not sure just what the business model is but the blurb about half the sales coming from out of state buyers seems a bad sign.

    If pot laws are relaxed in other states (something that seems likely to me) the number of out of state buyers would decline.  

    Bloomberg link

    My fear is that (none / 0) (#9)
    by Mikado Cat on Wed Mar 12, 2014 at 09:09:57 AM EST
    there are going to be issues with minors. I grew up in house where the rule was if you are going to smoke pot, do it at home, and grow your own, don't mess with drug dealers.

    With legalization and parents that smoke, I don't see those parents being very strict about keeping the pot from their kids. More like families that drink wine, allow their kids to have some from time to time.

    I get the feeling somebody against pot is waiting out there to make trouble for such a family.

    Interesting site, price of weed

    Fear not... (none / 0) (#13)
    by kdog on Wed Mar 12, 2014 at 03:11:26 PM EST
    legal or not, every parent I know who enjoys recreational marijuana is very strict about keeping the kids in the dark, at least until they are old enough to understand.  At that point, a family that parties together stays together;)

    What I find ironic is nobody bats an eye when adults drink and even get hammered in front of their kids...that's fairly normal.  But being seen smoking a joint by a minor is some kind of grave sin, or a sign of a bad parent.  Whats up with that?  

    Even I'm conditioned this way...if I'm out and about partaking and see I kid I immediately feel guilty and move to a new spot or extinguish, yet I think nothing of drinking a beer or 6 in front of minors.  Sh*t when I was a kid, I'd bet I never saw my parent's friends sober;)

    What a difference a drug's popularity and social acceptance makes in how we are conditioned to behave/feel.

    Parent

    Maybe one thing is (none / 0) (#14)
    by jbindc on Wed Mar 12, 2014 at 04:14:43 PM EST
    What I find ironic is nobody bats an eye when adults drink and even get hammered in front of their kids...that's fairly normal.  But being seen smoking a joint by a minor is some kind of grave sin, or a sign of a bad parent.  Whats up with that?  

    Consuming alcohol, even in front of your kids, is legal.

    Most people, however, don't think it's a good idea to commit a federal offense in front of kids.

    Parent

    Most People (5.00 / 1) (#15)
    by squeaky on Wed Mar 12, 2014 at 05:35:27 PM EST
    Most people, however, don't think it's a good idea to commit a federal offense in front of kids.

    Your analogy, albeit literally correct, is very weak tea.

    Most people do not think of smoking weed in the grand way you are portraying it.

    Parent

    I disagree (none / 0) (#17)
    by jbindc on Wed Mar 12, 2014 at 06:20:55 PM EST
    Especially when you are talking about doing it in front of their kids.

    People know pot is illegal - it's part of the reason many people do it in the first place.  But most parents, I would have to believe, don't want their kids to know a) they are stoners and b)that they think it's ok to break the law.

    But of course you are going to argue with me...

    Parent

    Obviously (5.00 / 1) (#18)
    by squeaky on Wed Mar 12, 2014 at 06:48:20 PM EST
    We know very different people.

    Parent
    Mmm... (none / 0) (#20)
    by jbindc on Thu Mar 13, 2014 at 06:47:59 AM EST
    I posed this very question last night to some people I know that smoke pot. I did not give my response - all I asked is "Would you smoke pot in front of your kids?"

    They all answered "No."

    When I asked why not, when they would drink in front of their kids, they all sais, "Becaus smoking pot is illegal and we don't want our kids to see us doing it."

    (And for the record - I live in area that is older hippie central).

    Parent

    Federal offense? (