The once illegal herb now found in retail outlets in Colorado generated $2 million in taxes for the state during the first month of recreational cannabis sales. The figure, released by the Colorado Department of Revenue, includes several tax layers at the state and local level. The number reaches $3.5 million when combined with revenues generated by sales of medical marijuana in January.
The tax dollars associated with recreational cannabis sales in Colorado include a 10 percent sales tax on retail cannabis and cannabis products in addition to a 2.9 percent existing state sales tax. Consumers must also pay local taxes on top of the state taxes and an additional 15 percent tax is generated for the state when cultivation facilities transfer cannabis to retail outlets.
Licenses and fees for medical marijuana, established in Colorado in 2000, outpaced those on retail marijuana by a large margin; medical shops brought in $496, 361 in January and retail shops brought in $96,300. The ratio of medical shops to recreational is still higher in the state.
Now the question in Colorado is how to spend the funds. The first $40 million in excise tax was approved by voters last year to be used for school construction. With a projected $35 million in cannabis revenue by the end of the current fiscal year, Gov. John Hickenlooper has proposed spending the funds on issues such as youth marijuana-use prevention efforts and substance abuse treatment.