Colorado hits half bil­lion in cannabis tax rev­enue

The Denver Post - - BUSINESS - By Ali­cia Wal­lace

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.

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