Colorado Voters Support Tax on Marijuana Sales

A news release from the marijuana advocacy group NORML revealed that voters in Colorado supported a tax rate for the commercial retail sales and production of cannabis.

Our Colorado marijuana lawyers, are committed to sharing news regarding Colorado’s marijuana laws and taxation policies. Taxing marijuana produces revenue for the state it should not make the medicinal marijuana at dispensaries prohibitively expensive.

The release from NORML explains that voters in The Centennial State voted for a ballot measure that established marijuana retailers and producers statewide. These state-licensed institutions were approved in 2012.

The legislator proposed a punitive tax on marijuana retail sales in Colorado and the measure (called Proposition AA) was passed.

NORML and other organizations oppose the hike in taxes because it has the risk to keep the black market alive in the state of Colorado.

Excessive taxation may make legalized marijuana from licensed dispensaries prohibitively expensive for those patients registered to acquire it.

The new tax provides for a 10 percent special sales tax on all marijuana products sold by licensed stores in the state.

In addition, this measure authorizes an excise tax of 15 percent. According to the Internal Revenue Service, an excise tax is a tax paid when the purchase is made.

An example of an excise tax is the tax on gasoline. The tax is frequently included in the actual price of the product.

This means Proposition AA will have the effect of raising prices of marijuana on the shelves and then again at the cash register.

Colorado NORML is not generally opposed to all taxation of marijuana but feels that excessive taxation is completely unnecessary.

Colorado NORML feels that the current licensing fees and tax structure are sufficient to maintain a robust enforcement agency for marijuana.

Under the previous tax laws the Medical Marijuana Enforcement Division generated $6 million in revenue from state taxes on marijuana sales (through the 3rd quarter of 2013).

The estimates for marijuana retail sales in 2014 project sales in the amount of $394.6 million. Colorado NORML believes this to be a conservative estimate. However, using this number and the local taxes of 3.5 percent combined with the normal 2.9 sales tax of the state would mean a revenue of $25 million to fund local and state regulatory enforcement.

These estimates do not even include the various licensing and application fees collected by the local and state regulators.

If taxes become too high it will keep the unregulated market in Colorado alive in Colorado. Another contributing factor that may keep the black market alive is the refusal of local communities to ban the recreational use of marijuana.

The Colorado CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Medical-pot sellers fear being ‘thrown under bus’, Oct. 20, 2013, Associated Press
More Blog Entries:

Medical Marijuana Across the U.S.: A Progress Report, Aug. 12, 2013, Los Angeles Medical Marijuana Lawyer Blog
Synthetic Marijuana Dealer Convicted in Closely-Watched Federal Case, Oct. 14, 2013, Los Angeles Marijuana Lawyer Blog