January 1 marked the first day of legalized marijuana sales in Colorado. Hundreds of adults turned out to retail marijuana businesses to purchase the first marijuana for legal sale in the United States for recreational purposes. The number of consumers was so high that many retailers worried they would run out.
Denver, CO as well as twenty-five other Colorado cities, now allows existing medical marijuana businesses to also sell marijuana for recreational purposes. In Denver, 14 such businesses opened their doors on Jan 1. Though cities can set their own restrictions on the business hours for these sales, state law requires that they not open before 8 a.m. and must close no later than midnight.
The governing law, the Constitution of the State of Colorado, Article XVIII, Section 16 (voter-approved as Amendment 64) requires that only adults who are 21 or older be permitted to buy retail marijuana. Colorado residents can purchase (and be in possession of a maximum of) one ounce of marijuana, but non-residents are restricted to possession and use of a fourth of an ounce. Consumers are restricted from taking the marijuana across state lines.
Before marijuana lovers get too stirred up, they should know that public marijuana use is still prohibited. It is also still illegal to use or consume marijuana in a motor vehicle or to drive under the influence of marijuana. Whether or not social clubs or hotels will be able to discreetly offer areas to use retail marijuana remains to be seen. Legally, smoking marijuana is prohibited in the same manner as cigarette smoking, so marijuana clubs and coffee shops are not currently permitted in Colorado.
What will be the social and economic impact of Colorado’s new law? The stated purposes/intent behind the law are “the efficient use of law enforcement resources, enhancing revenue for public purposes, and individual freedom” and that marijuana should be taxed in the same manner as alcohol. Though the hundreds who showed up to purchase marijuana would agree that the law supports individual freedom, its other effects remain to be seen. A 2012 research study by the Colorado Center on Law and Policy estimates that regulating retail marijuana similarly to alcohol would produce 60 million dollars in combined savings and additional revenue to the state of Colorado during the years before 2017, with a potential to double that number after 2017.
A high percentage of that revenue would come from taxation. As such, the cost of retail marijuana might be a “downer.” Retail marijuana will be taxed with standard sales tax (just as medicinal marijuana is taxed), but special state sales and excise taxes and local sales and excise taxes in many cities will also be added. In Denver, this may mean taxation at nearly 29 percent. The government assures that this taxation will be beneficial. Denver City Council President, Mary Beth Susman, expects approximately 3.4 million dollars in additional tax revenue for 2014, most of which will go towards enforcing regulations and producing education programs regarding marijuana usage. All of the revenue generated by excise taxes on wholesalers will go to the Colorado Public School Capital Construction Assistance Fund.
Colorado is breaking new ground and many believe it’s “high” time. Colorado is legally open for marijuana sales. The world will surely be watching to see if Colorado reaps the promised rewards.
By Christine Fredriksen