Colorado’s Marijuana Sales are Skyrocketing

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It hasn’t been long since Colorado officially legalized marijuana, and within a short time period, marijuana sales are already flourishing. According to the Colorado Department of Revenue, in March alone, retail taxes on recreational marijuana reeled in $1.898 million to the Colorado government. After adding in medical marijuana sales tax and licenses, the first three months of marijuana sales have yielded a net of $12.6 million in taxes. This should not come as a surprise as it was reported that owners of marijuana stores collectively made $1 million in sales the first day recreational marijuana was legally made available to consumers. With such promising numbers and a continuing upward trend in sales, the legalization of recreational marijuana has had a positive effect on Colorado’s economy.

How Will the Colorado Government Spend the Tax Money?

Initially, the Governor of Colorado John Hickenlooper’s proposal included 6 major priority areas to allocate the tax money generated from marijuana sales. He proposed spending $45.5 million in youth use prevention, $40.4 million in substance abuse treatment and $12.4 million for public health. He also hoped to launch a three-year statewide campaign highlighting the health risks associated with marijuana. The plan also included $1.9 million to the Department of Transportation to launch a “Drive High, Get a DUI” campaign. Lastly, Hickenlooper hoped to allocate $7 million for 105 additional beds in treatment centers for substance abuse. Colorado’s legislative budget committee recently approved a much more modest version of the Governor’s initial proposal. They approved spending $31.4 million for the prevention of youth drug use, addiction treatment, as well as for research and public education campaigns. The committee members made additional tweaks to the plan by shifting the focus from youth marijuana prevention to adult drug treatment. The committee also changed how the money would be spent. The governor’s proposal called for spending the marijuana tax money as it came in; however the committee changed the plan to not spend the money until the year after it is collected. Although this new finalized plan gained unanimous support from the committee, it is likely that there will be more changes before it arrives at the Governor’s desk for approval.

Other Positive Effects of the Legalization of Recreational Marijuana

The increase in tax revenue for the Colorado government is not the only benefit of Colorado’s decision to legalize recreational marijuana. Since recreational marijuana has become legal, Colorado’s crime rate has decreased. Homicides have decreased by a staggering 52.9%. Additionally, new jobs have been created by the emerging recreational marijuana industry. Some of the 13 different types of jobs in the industry include:

  • Budtending: Similar to a bartender, the person listens to the requests of a customer and recommends an appropriate strain of marijuana;
  • Grow Site Owner/Occupier: Owners receive the net profits after paying all of the costs associated with growing marijuana and the operators receive a portion of those net profits; and
  • Trimmer: A person who harvests and processes the cannabis.

Overall, it is remarkable how much the legalization of recreational marijuana has boosted Colorado’s economy and created a value for its government in just a matter of months.

 

 

Topics:  Department of Revenue, Job Creation, Marijuana, Retail Market, Tax Revenues

Published In: General Business Updates, Finance & Banking Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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