Nestled comfortably among the highest mountain tops of the Continental divide, Colorado’s tax problems seem to be an issue of the distant past, thanks to an abundance of new tax revenue pouring in from the legal marijuana market – far exceeding the states lofty expectations. At least according to the new budget proposal announced Wednesday by Colorado’s Gov. John Hickenlooper, who has provided the first official estimate of just how much tax revenue the Centennial state can expect to rake in from recreational marijuana sales.
According to some online reports, the proposal outlines a plan to throw around some serious cash next year. High on their list, the state will spend approximately $99 million next fiscal year on substance abuse prevention, educating kids about the potential harm of marijuana use. The new revenue stream would come from a statewide 12.9 percent sales tax on recreational marijuana. Currently it is projected that Colorado’s combined pot sales for the next fiscal year were estimated to be approximately $610 million. Representing some serious green in their rush.
As Colorado’s brick and mortar pot shots fired up legal sales on Jan. 1, marijuana has been flying off the shelves at an incredible rate – leading to a massive pile of new tax revenue – unfortunately, the exact figures for January pot sales won’t be released to the public until early next month.
Despite that, Governor Hickenlooper estimated sales and excise taxes for the next fiscal year would produce approximately $98 million, a far better return for their effort than the originally estimated $70 million annually. The number provided to voters when they were asked to consider new pot taxes last year.
Colorado’s new found wealth will be utilized wisely; $45.5 million will be allocated for youth use prevention, $40.4 million for substance abuse treatment and $12.4 million for public health.
“We view our top priority as creating an environment where negative impacts on children from marijuana legalization are avoided completely,” the governor explained in a letter to legislative budget writers, who must accept the new numbers.
Hickenlooper also proposed a $5.8 million, three-year “statewide media campaign on marijuana use,” presumably highlighting the drug’s health risks. The state Department of Transportation would get $1.9 million for a new “Drive High, Get a DUI” campaign to tout the state’s new marijuana blood-limit standard for drivers.
Additionally, the Gov. has proposed spending a whopping $7 million for 105 beds in residential treatment facility for those who fall victim to substance abuse.
“This package represents a strong yet cautious first step” for regulating pot, the governor wrote. He told lawmakers he’d be back with a more complete spending prediction later this year.
And that’s just the beginning of the state’s new windfall, an additional 15 percent marijuana excise tax, estimated to generate approximately $40 million a year is designated for new school construction– and the governor has projected the full $40 million to be reached next year.
These new tax projections offer a substantially better outcome than originally offered to voters in 2012, when state fiscal projections on the marijuana-legalization amendment would produce $39.5 million in sales taxes next fiscal year, which begins in July.
The greener projections are the results of updated data regarding how many pot shops Colorado currently allows (163 as of Feb. 18), and just how much cash customers are shelling out for their Colorado chronic. Obviously, in a free market there’s no regulated pot prices, it’s all about supply and demand … and because the demand is high for Colorado’s pot, most pot is selling for as much or more than the $200 an Oz.