As one of the first states to legalize the adult use of recreational marijuana, Colorado has often been the first place where new marijuana policy related developments have occurred. The latest milestone reached by the state comes in a financial form. Colorado has now officially earned over $500 million in tax revenue from cannabis sales as of May this year. The sales include both medical and recreational marijuana sales starting from January 2014. The majority came from recreational cannabis sales and has increased every year.
A Bright Future for Colorado Cannabis Sales
VS Strategies, a research company that supports the legalization of marijuana, calculated the state’s earnings since recreational marijuana was legalized. In 2014, $76 million in sales were accrued and by last year this number increased to $200 million. The Denver based research company believes that the state is already on track to beat last year’s earnings, showing the continual growth coming out of Colorado’s marijuana industry. As a pioneer in marijuana legalization, the rest of the country looks towards Colorado as a measuring stick to see what the legalization of marijuana could produce.
How Colorado Marijuana is Taxed
Medical marijuana was legalized in 2000 with the state charging a 2.9% sales tax. Recreational marijuana is taxed a lot higher than this however. On top of the standard 2.9% sales tax, an excise tax of 15% and a special sales tax of 10% is applied. Additionally, there are license and application fees for anyone wanting to enter the business as a grower, producer, tester, distributor or retailer. All in all, the research shows the potential financial growth for any state ready to end prohibition. The revenue has gone towards education and other community services such as substance abuse programs and youth mentoring programs.
Climbing Out of Deficit
VS Strategies hosted a news conference on Wednesday to discuss the results of the research. While many were enthusiastic about the state tax revenue, some economists pointed out that there is still a deficit and much more is needed. Marijuana sales still only make up a portion of the taxes collected for the state. Yet, it goes a long way in assisting organizations such as Adoption Exchange who will receive a $116,000 grant to assist older children in need of care who are close to aging out of the system. Its services such as these that pro-legalization advocates are enthusiastic about when it comes to the large amount of tax revenue being generated.
8 states and Washington D.C. have legalized recreational marijuana while 29 states have legalized medical marijuana. More states such as Rhode Island and Vermont are discussing future plans for legalization through legislature rather than a public vote. According to recent polls, the majority of Americans are in favor of legalizing the plant. Marijuana has been found to be both safer and healthier than tobacco and alcohol as well as having a host of well documented medicinal benefits. It would seem that ending prohibition would go to serving the public on many levels with the money from marijuana sales going towards legal enterprise as opposed to the black market.