Taxes Generated From Marijuana Sales in Denver Will Not Be Wasted

Taxes

As the entire nation sits back and watches the legalization situation in Colorado,  millions of dollars of tax revenue generated by recreational marijuana sales continue to roll in to the state. From the single month of January 2014, the city of Denver is expected to receive 3.5 million in tax money generated from recreational and medicinal marijuana sales that will not be wasted.  Many are speculating on what the city will choose to do with the several millions of dollars in extra tax revenue created by the marijuana industry in just a few months.

When Colorado passed Amendment 64 in November of 2012, it was not known what type of taxes would be imposed on the sale of recreational marijuana. Voters in the state recently passed a 15 percent excise tax on top of regular sales taxes. Needless to say, when someone purchases marijuana in Colorado the normal price can skyrocket as high as 22 percent. That is not easy on the wallet, but obviously consumers in Colorado are willing to pay these taxes without second thought. After all, they are the ones who enacted the high taxes to begin with.

By the end of 2014, the city of Denver could see upwards of forty million dollars in tax revenue generated by the sales of recreational marijuana, so it is no wonder that folks are concerned about their hard earned  money being wasted. There is flat out fear that abundance of tax revenue could be wasted on measures such as increasing the incarceration rates or banning large sized sodas like New York City did earlier this year. When Coloradans voted yes on Amendment 64 it was understood by all that the first forty million dollars of tax revenue generated by the state in recreational marijuana sales would go school construction. Do the math. That first forty million has come and gone extremely quickly. Rest assured, Denver Mayor Michael Hancock has responsible plans for spending the excess of tax revenue.

One area that is in need of immediate, unwavering attention is the ongoing regulation of the marijuana industry in Colorado. In a proposal last week, Denver Mayor Hancock suggested that this is where over half of the extra tax money will go. Just because it is legalized, does not mean that the market for marijuana sales is now an entrepreneurial free-for-all that wastes Denver tax dollars.  Funds reserved for regulating recreational marijuana sales would go towards hiring administration for the marijuana industry such as tax auditors, fire safety experts and health inspectors to oversee the manufacture of edible marijuana.

Legalization of recreational marijuana sales also means hiring more law enforcement agents and forensic scientists. In light of the recent ethical problems that the Denver Police Department has had, using a quarter of this generated tax money to hire more qualified law enforcement officials would be highly revered by Denver citizens and not considered to be wasteful. The remaining quarter of the tax revenue budget is reserved for education, but there is some debate over what areas of education are most in need of funding. Officials want to make sure that money put in to education finance is effective. “We don’t want to just add money to education and hope there is an impact,” said City Budget Manager Brendan Hanlon. Youth marijuana prevention is one of the most important efforts for the state. The last thing Colorado wants is for legalization to be associated with increased usage among youth, or any age group for that matter.

By Sarah Gallagher

Sources:
Forbes
The Denver Post
Denver Westword

4 Responses to Taxes Generated From Marijuana Sales in Denver Will Not Be Wasted

  1. Sharon Jones September 18, 2014 at 3:05 pm

    Why are there no consideration to health, both mental and physical. People are getting sick from this drug and run up thousands of dollars in medical debt.

    Reply
  2. Charlotte September 9, 2014 at 2:07 pm

    Why the heck do you not put the money in education? There are clear needs in in Colorado education, it is ridiculous to try and justify not doing so. Organize a flipping meeting with members from all the school districts and figure out what they need and give it to them!

    Reply
  3. The Shootist June 20, 2014 at 10:17 am

    Better to be legal and taxed than black market. untaxed and illegal

    Reply
  4. Robert Chase June 19, 2014 at 3:44 pm

    This article is the most outrageous disinformation imaginable; ALL of Denver’s sales tax surcharge on cannabis is to be wasted! Voters should pay attention to Hancock’s plan for the proceeds from municipal Referred Question 2A — most is going for unneeded staff in Excise and Licensing. With DPD in dire need of investigation, prosecution, and reform, no monies from the sale of cannabis should be going to it, much less $825,000 — cannabis is independently lowering crime and DPD is committing them! Let alcohol peddlers in Larimer Square be heavily taxed to cover the costs of removing the bodies. Our reactionary City Council is concerned that only $746,000 goes to so-called “education” — it is very important to them that people be paid to whet children’s interest in cannabis. The Establishment is certain that a whole lot of money ought to be spent on “education”, but we know that the curriculum will be so full of lies and exaggeration as to probably have the opposite of the effect intended. This spending program demonstrates why it was a mistake to support 2A; fewer supported the City’s surcharge than the State’s (Proposition AA), but Steadman’s SB14-215 thoroughly wastes the State’s take too — State taxes on retail cannabis will support police, the Executive Branch, and prosecutors, so don’t pay them!

    Reply

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