Marijuana Sales in Colorado to Reach $1 Billion
Marijuana sales in Colorado are expected to reach $1 billion according to a budget proposal put forth by Governor John W. Hicklooper for next fiscal year. New budget numbers also project taxes imposed on the sale of marijuana could exceed more than a $100 million a year.
On February 20, the state’s marijuana sellers and growers were required to report and pay the sales tax they collected in January giving the state a glimpse of how the legalization of marijuana will impact future budgets. On Monday Colorado will release its first report on tax revenue it received from the sales of marijuana according to the state Department of Revenue. The first report will detail tax revenue collected by the state beginning on January 1, the first month that the sales of marijuana were legal.
Governors and state lawmakers from around the nation will be closely examining marijuana sales in Colorado and the tax revenues collected from these sales. Colorado has proposed to use $40 million in revenue to fund the construction of new schools. Other revenue will be used to fund programs in heath care, substance-abuse and public health. Voters last November approved Amendment 64 that legalized marijuana use and mandated a 15 percent excise tax and a 10 percent sales tax collected on the sale of marijuana.
Opponents and some economists have cast doubt on the projected revenue stream from marijuana sales in Colorado. They claim that higher costs in law enforcement and regulating the industry could surpass the revenue collected from the sales of marijuana. Democratic Congressman Patrick Kennedy is one such opponent. Kennedy who has had a life time struggle with alcohol and drug dependency is concerned that the legalization of marijuana in Colorado sends the wrong message. According to Kennedy, whose father was the late Ted Kennedy, the country is about to go down the wrong road in the opposite direction of a sound mental health policy. In January Kennedy launched a new lobby group that opposes marijuana legislation.
It has been speculated that the illegal underground marijuana market will continue to prosper in this new era of legalized marijuana. However a survey conducted by Medical Marijuana Business Daily indicates that 61 percent of Colorado’s marijuana users would prefer purchasing from legal sources as opposed to buying from a street level drug dealer. In fact the survey revealed only 5 percent felt any loyalty to the underground market despite the legalization of marijuana.
Retail sales of marijuana will begin in the state of Washington this June. Budget projections in Washington forecast marijuana sales could fetch up to $190 million in taxes in four years. The state will allow 334 marijuana stores to open in June. The voters approved a ballot initiative that provides for legalized possession of marijuana but didn’t legalize use or the public display.
Gallup polls reveal now that 58 percent of all Americans now support the legalization of marijuana compared to only 12 percent who supported legislation in 1969. The number rises to 67 percent for those between the ages of 18 to 29. Expect more states to follow in Colorado and Washington lead in legalization of marijuana. Proponents of legalized marijuana legislation are building momentum in Alaska, Arizona, California, Nevada and Oregon. With expected marijuana sales in Colorado to reach $1 billion its shouldn’t be long to see these states with initiatives on their ballots soon.
By John J. Poltonowicz