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Colorado collects $2M in pot taxes

By Kay Bell · Bankrate.com
Tuesday, March 11, 2014
Posted: 3 pm ET

Colorado's coffers are around $2 million more full, thanks to taxes collected in January in connection with legal recreational marijuana sales.

On Jan. 1, Colorado became the first state to sell recreational weed. Washington state will start selling -- and taxing -- legal recreational pot this summer.

But some had expected Colorado's tax take to be better.

First legal weed sales, taxes

The Colorado Department of Revenue figures released this week show that in the first month of sales, the state pulled in around $1.4 million from the 10 percent state sales tax on recreational marijuana. Another $416,690 came in thanks to the state's standard 2.9 percent sales tax on all retail transactions.

These sales taxes will go toward marijuana-related education programs and similar projects, not for general state expenditures.

Another tax, 15 percent on wholesale transactions, brought in $195,318 in January. That money will help pay for school construction.

Add in the taxes and fees from medicinal marijuana sales and Colorado got around $3.5 million in January from total pot sales.

Legal pot taxes lagging

Two million bucks is nothing to scoff at, but Colorado's first tax take on recreational marijuana is not quite what was predicted.

If the recreational pot tax collection remains the same throughout 2014, that will come to $24 million during the calendar year. Weed supporters had predicted much more in tax revenue during the legalization campaign.

Even government officials were more optimistic.

Before the 2013 vote, Colorado legislative analysts projected that in the first six months of 2014, which also are the final six months of the state's 2013-2014 fiscal year, the state would bring in $33.5 million in marijuana taxes. For the full 2014-2015 fiscal year, $67 million in pot taxes was projected.

And Colorado Gov. John Hickenlooper's budget proposal issued in February cited projections of $184 million for all marijuana-related revenue over the 18-month period that ends June 30, 2015.

What happened?

No one is quite sure why the January recreational pot taxes lagged. Some point to a state rule that exempted some early marijuana transfers from the excise tax.

And there's hope that as more retail operations open, the tax collections will pick up.

Officially, state officials say they are happy.

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

You've got to suspect, however, that Colorado is hoping for higher marijuana tax collections as the year goes on.

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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."

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13 Comments
Luis
March 14, 2014 at 1:30 pm

Colorado Governor Mr. John Hickenlooper:
This is some kind of destruction of our young people the future of our Country. Shame you Governor of Colorado and all your Staff that promote this Marijuana sales to make more money for your State.
This are facts about marijuana:
Marijuana: Facts
Parents Need to Know
The human brain does not fully mature until the
early twenties. Among the last areas to develop
are those that govern impulse control and
planning. So what might that mean for teens?
On one hand, they may be more adventurous
than adults, willing to take chances…on
the other, this could involve risky behaviors,
including drug use.
The trick is to find ways to encourage your
kids to be the unique individuals they are,
without exposing themselves to the dangers of
experimenting with drugs—including marijuana.
Talking openly about it is a good start.
—Nora D. Volkow, NIDA Director
Destroying our youth the future of our Country for money is WRONG.
I urge the other States to refuse the Colorado Governor Ideas and
don’t Destroy our youth future.

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