Tax revenues from Colorado’s cannabis industry have topped $1 billion since legalization, according to a new report released on Wednesday by Denver cannabis law firm Vicente Sederberg. The report details and analyzes fees and taxes collected by the Colorado Department of Revenue since the beginning of legal sales of cannabis for adult use on January 1, 2014. Colorado voters legalized possession and sales of recreational marijuana with the passage of Amendment 64 in 2012.
Taxes and fees collected by the Department of Revenue totaled $1.02 billion at the end of April, according to data from the agency. The figure “does not include hundreds of millions of dollars in additional cannabis related taxes and fees collected by local governments,” the report notes.
Since 2014, more than $6.56 billion in regulated cannabis sales have taken place in the state, including more than $4.46 billion in sales for adult use and nearly $2.1 billion in medical marijuana purchases.
Cannabis Taxes Support Education
More than $283 million of cannabis tax revenue has been dedicated to K-12 education, with a majority of the funds used to build new schools. Amendment 64 directed the state legislature to enact a tax on wholesale transfers of cannabis for adult use and allocated the first $40 million collected each year to a program to fund school construction known as Building Excellent Schools Today (BEST).
In addition to supporting schools in Colorado, marijuana tax revenues have been used to fund cannabis research, substance abuse treatment and prevention efforts, affordable housing, mental health services, and other public health programs.
Funds are also used to cover the costs of regulating the industry, which accounts for a small fraction of cannabis tax revenues. A portion of marijuana tax revenues collected by the state is also shared with local governments.
Pot Taxes Help But Aren’t ‘Fiscal Panacea’
Brian Vicente, a co-author of Amendment 64 and founding partner of Vicente Sederberg, said in a press release that while they cannot be relied upon to solve all of a state’s fiscal woes, cannabis industry taxes are being used to improve Colorado.
“We were never under the illusion that legalization would be a fiscal panacea, but we knew it would have a substantial and positive impact,” Vicente said. “Funds are being used on everything from building schools to hiring school health professionals and paying for bullying prevention programs.”
Mason Tvert co-directed the Amendment 64 campaign and now serves as vice president of communications at VS Strategies, the public affairs consulting affiliate of Vicente Sederberg. He said that the majority of states that still prohibit commercial cannabis sales can take a lesson from Colorado’s experience.
“Generating tax revenue is not the only reason or even the best reason to regulate cannabis,” said Tvert. “But when those revenues start adding up to more than $1 billion, as they have in Colorado, it’s a pretty attractive bonus. It’s crazy to think how much money states are flushing down the toilet by keeping marijuana in an illegal market.”
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Author: A.J. Herrington