California

Colorado Makes Big Money from Legalized Marijuana

For the first time in history, marijuana tax revenue has outpaced alcohol tax revenue in Colorado, according to a new report by the Marijuana Policy Project, an organization focused on ending marijuana prohibition nationwide.

Is that claim true, or is it just smoke and mirrors?
 
"It is true," says Joseph Henchman, Vice President of Tax Foundation, a non partisan think tank in Washington, D.C. "Colorado has raised about $70 million over the last year from its marijuana taxes, and that's pretty much on projection."
 
According to data from the Colorado Department of Revenue, that $69.8 million hauled in by the Centennial State's special marijuana taxes--10 percent on retail sales and a 15 percent excise tax paid by pot producers--certainly outpaces the nearly $42 million brought in by alcohol tax revenue, which ranges from a few cents to a few dollars per gallon.
 
There are a few caveats to those numbers, experts say.
 
"It's worth noting, of course, that Colorado has very high taxes on marijuana, and very low taxes on alcohol," Henchman said. "So it's not like alcohol sales aren't still much more than marijuana sales."
 
In fact, alcohol sales in Colorado are much higher than pot, and the Marijuana Policy Project's analysis doesn't account for general sales tax.
 
"Overall, [the report is] just the specific special taxes levied on marijuana versus alcohol," said the group's Deputy Director of Communication, Lauren Vazquez. "They are higher for marijuana. We are generating more revenue from marijuana than alcohol."
 
With alcohol sales outpacing marijuana sales, it's likely that accounting for the general sales tax would greatly distort the report's margin.
 
Still, it is undeniable that pot sales in Colorado are soaring. 
 
Over the past year, the numbers have increased by 70 percent.
 
Now lawmakers from other states weighing the financial benefits of legalization are taking notice.
 
"We're getting calls from state legislators all over the country wanting to hear, what are the lessons learned and how do we apply to them to our state?" said the Tax Foundation's Joseph Henchman.
 
A ballot measure to legalize recreational pot in California next year might give the Golden State a chance to test out those pointers first hand.
 
 
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FY 2014 Marijuana Tax, License, and Fees Report (Text)
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