On the first of January this year, Colorado began an unprecedented social, political and economic experiment when it not only legalized marijuana for adults twenty-one and older but also implemented an entire system to regulate, tax and distribute cannabis products.In its first month, Colorado collected nearly $9 million in taxes from sales, most of which came from Denver stores.
The state’s initial earning estimates seem to be on track and will probably be surpassed, with some estimates as high as $133 million for this fiscal year. Many counties and municipalities in the state initially rejected the introduction of retail stores but have decided to revisit the issue on ballots throughout the next few election cycles. However Palmer Lake, a sleepy community between Denver and Colorado Springs, just voted against recreational marijuana stores within its city limits this past Tuesday.
The first $40 million in excise tax collected from medical and recreational sales is to be directed toward school construction but after that, things get murky. Governor Hickenlooper has expressed a desire to put a large portion of the remaining haul toward teen prevention and education programs, substance abuse treatment and “Don’t Drive While High” campaigns. Four months in and with a robust revenue the first problem does not seem to be free-wheeling pot smokers but how the state will spend the money.
While an excess of tax revenue does not seem like a problem, Colorado’s Taxpayer’s Bill of Rights (TABOR) mandates that if the income exceeds $67 million (which it most likely will) the money will be refunded back to the citizens. Lawmakers will have to bring the issue to vote, as stipulated by TABOR, as to whether the tax money goes back to Colorado residents or stays with the state. All of this is still uncertain, as no one knows just how much tax revenue there will be. Regardless, it will take careful negotiations and legislation on behalf of Colorado lawmakers to avoid a sticky situation for the state budget.
If the tax revenues do end up necessitating a refund, the money will likely come from the state’s general fund, rather than the large chunk of change generated from the medical and recreational cannabis sales. Outside of the legal complications surrounding the tax revenue, Colorado has seen little else in way of problems. The first marijuana related death was reported after a man fell to his death after allegedly eating a cookie supposedly baked with pot inside. Authorities continue to investigate the death.
Hospitals have reported a few cases of children consuming edibles, but with no serious injuries. Looking forward, Washington begins its rollout of the legal sale of marijuana this spring. Other states are adding full legalization, decriminalization and medical marijuana proposals to ballots for the upcoming years. A recent poll from the Pew Research Center reports that 75 percent of respondents anticipate full legalization in the next few years. While 39 percent believe it should be legal for adults, only 16 percent oppose full legalization. With this many citizens on board it is only a matter of time before states begin to implement systems similar to those of Colorado and Washington.
The possibility that marijuana consumption and sales could become legal at a federal level proves an exciting prospect for the social and cultural evolution of America while potentially bringing in much needed tax revenue from a source that is not forced upon all citizens. On the first of January this year, Colorado may have started a social, political and economic experiment that will change the entire United States when all is said and done. Colorado collected nearly $9 million in taxes from sales, most of which came from Denver stores.
By Brett Bustos