Although prohibitionists have often claimed that the financial predictions attached to the Colorado cannabis industry were overinflated pipe dreams, it seems they were wrong. The latest statistics from the Colorado Department of Revenue find that not only did the sale of legal cannabis earn nearly $70 million in tax revenue during the first fiscal year, but it also savagely defeated the less than $42 million brought in from the alcohol trade.
Yesterday, cannabis consumers across the state took advantage of a tax holiday on all recreational cannabis purchases. The 10 percent special tax and the 15 percent on wholesale transfers were removed from the equation for one day only. Proponents responsible for the passing of Amendment 64, making Colorado the first state in the nation to repeal prohibition, said that everyone who has purchased cannabis legally over the past year fully earned not having to pay taxes on Wednesday.
“Marijuana taxes have been incredibly productive over the past year, so this tax holiday is a much-deserved day off,” Mason Tvert, director of communications for the Marijuana Policy Project, said in a statement. “ This will be the one day out of the year when the state won’t generate significant revenue. Over the other 364 days, it will bring in tens of millions of dollars that will be reinvested in our state.”
The total haul with respect to Colorado cannabis sales was $69,898,059 in tax revenue earned between July 2014 and June 2015. But, what makes the latest figure so impressive is the fact that it is all new money; revenue that the state was previously losing.
“It’s crazy how much revenue our state used to flush down the drain by forcing marijuana sales into the underground market,” Tvert said. “It’s even crazier that so many states are still doing it. Tax revenue is just one of many good reasons to replace marijuana prohibition with a system of regulation.”
To break it down, Colorado raised $43,938,721 from the special tax and $25,959,338 on the excise tax. Surprisingly, the state only raised about $9 million in tax revenue from the sale of beer. The rest of the $41.8 million came from liquor. However, the brewing industry maintains that the cannabis market is not hurting their business. In fact, most brewers say business is better now than ever.
It would be interesting to learn how much money is still being spent on the state’s black market. There is very little doubt that the state is missing out on substantial revenue because of federal prohibition.
What do you purchase more often: cannabis or alcohol? Tell us in the comments.