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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
mikee
March 14, 2014 at 11:33 am

we need this legal everywhere, and law should make it so you cannot be fired in partaking in legal activities as Eric said nice JJ you called it a rant but I just read truth

Eric
March 14, 2014 at 9:03 am

Of course sales are not whats expected. The government did not take in account that even though it is legal to smoke marijuana most employers will still fire you for it. People that may helped the money grow are to scared.

CYREL DWELL
March 14, 2014 at 8:34 am

WHY NOT LEGALIZE POT , ALCOHOL , PORK , SUGAR ,CIGARETTES, ECT IS WAT COST @ COULD COST DAMAGE . I HAVE MS , ALL WAT I NAMED , WORK AGAINST MS, DATS REAL !! CYREL

JJ
March 14, 2014 at 4:29 am

Why is the Government so greedy? They are no different than Credit card companies and all other Financial Institutions and car and insurance salesmen. Look how these institutions charge high interest rates to Low Income and poor credit individuals. The well-off citizens who have good jobs, good credit, get low interest rates. Citizens with low paying jobs should be charged low interest so that they can afford to buy a nice used car at an affordable price. This would help prevent them from losing their vehicles and homes.
The states that will be charging high taxes for Marijuana will force the low income people to purchase from the street. The folks who are well-off will also buy from the street vendors just to keep the states from getting their money. Now they are talking about taxing the Medical Marijuana also which means some of those folks will also be forced to purchase from the the black market because they can't afford the high taxes. If the Government was smart and reasonable they could make a lot of money because the people don't want to break the laws by buying from the black market. Creating unreasonable taxation creates criminals. I wonder if we will ever have a Government that really works for the people? Greed will be our downfall. Job outsourcing, outsourcing our manufacturing, selling our real estate, we are in debt to China and other countries. If everything would have been kept in the USA, we could have lived on $10-15/hour. If Farmers could grow like the old days, we wouldn't have so many hungry and homeless people here. I find it quite interesting that we can feed hungry children in other countries for 19 to 50 cents a day, but can't feed our own people. Sorry, I better stop ranting or I might get charged for something for expressing my opinions.

w.pelter
March 14, 2014 at 4:16 am

hay man wits up i live in VA i wood love to see VA legallis weed to

lincar4000
March 14, 2014 at 3:49 am

Hey pothead. Do you want your experiment to work out? Sure you can get it "cheaper" from your dealer but help your state out. We skied in Steamboat during Superbowl weekend and bought 3 grams of weed for 54 dollars. And I'm from Illinois. "I" want this to work as much as you guys do. Maybe one day it will be legal in the whole of the US! I don't even smoke weed that often. Once or twice a year. I just wanted to support Colorado. I gave the rest to a friend when I left, who took it happily.

Mike M
March 14, 2014 at 1:23 am

I agree with Mike. I also think that it should be covered by insurance, but one step at a time. At least America is finally waking up and smelling the Kush!!

CumCast
March 14, 2014 at 1:21 am

lol, leave it to liberal comcast to put MARIJUANA on the front page of their website. BUNA BUNGA

pothead
March 14, 2014 at 12:47 am

what do you expect a 1/8 from the shop cost 60 bucks I can get the same 1/8 off the street for 25-30

Mike
March 13, 2014 at 11:17 pm

What do you expect when you require it to be an all cash business. It;s ridiculous that these businesses cannot use the banking system. I am not in the bussiness but I suspect because they are required to be all cash, a significant amount of skimming is taking place.

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