Colorado hits half billion in cannabis tax revenue
Marijuana advocates are trumpeting a Colorado milestone: More than $500 million in revenue for the state since recreational cannabis sales started in 2014.
The medical and recreational cannabis tax revenue benchmark — achieved in May — was hailed Wednesday in a report from VS Strategies, the new public affairs and lobbying firm affiliated with cannabis law firm Vicente Sederberg.
The report highlights publicly available marijuana tax data from the Colorado Department of Revenue. It also outlines how some of those funds have been spent or allocated on both the state and local levels.
“It’s a meaningful milestone,” said Brian Vicente, a Vicente Sederberg partner and co-author of Amendment 64, the 2012 measure in Colorado to tax and regulate recreational marijuana.
Through May, Colorado marijuana shops had sold upward of $3.6 billion of medical and recreational pot, edibles and concentrates, according to The Cannabist’s calculations of state tax data.
The taxes and fees from those sales totaled $76 million in 2014, $135 million in 2015, $198 million in 2016, and $96 million through May.
That money is distributed to a host of different areas, including school construction grants, substance abuse programs; marijuana enforcement; and youth mentoring services.
Adoption Exchange, an Aurora-based nonprofit that helps find adoptive families for children in foster care, will receive a $116,000 next year — and could receive another $116,000 in each of the following two years — from The Tony Grampsas Youth Services Program, which was allocated more than $3 million in marijuana tax money.
CEO Lauren Arnold said during a VS Strategies news conference Wednesday that the grant will fund an expansion of Adoption Exchange’s mentoring program for older youth who are close to “aging out” of the system.
State Rep. Jonathan Singer, D-Longmont, who backed a new law adding post-trau- matic stress disorder as a qualifying condition for medical marijuana, said tax revenue directed toward substance abuse and mental health programs, but also served as a key budget fix to address rural hospital funding cuts.
“Marijuana has become the thread that holds our state budget together,” Singer said.
But Smart Approaches to Marijuana, a nonprofit organization that opposes legalization efforts, said the costs of drug use are greater than any financial benefits Colorado may reap.
“Like the tobacco industry before it, the Colorado marijuana lobby is touting marijuana as the panacea for every contemporary challenge Colorado faces,” SAM president Kevin Sabet said in a statement. “The truth is, the health and safety costs caused by the commercialization of marijuana far outweigh any revenues collected.”
Economists, notably Chris Stiffler of the Colorado Fiscal Institute, have frequently cautioned that marijuana tax collections represent a sliver of the state’s $10 billion general fund and cannot solve perennial budget woes.
“With the increased tax rates on marijuana, Colorado is expected to collect $255 million from marijuana this year, that’s about 2.3 percent of total state tax collections,” Stiffler said in an email Wednesday.
Marijuana tax revenue in Colorado does exceed collections for both cigarettes and liquor, he said. That can be partly attributed to Colorado having some of the lowest “sin-tax” rates in the U.S. The 8-cents-pergallon excise tax on beer is the third lowest among U.S. states and the tax of 84 cents per pack of cigarettes ranks 37th.
“Marijuana tax rates are relatively new and we’ve updated them to the world of 2017, while taxes on cigarettes and alcohol haven’t been modernized as recently as marijuana,” he said.