Colorado’s Department of Revenue recently released cannabis tax data for May 2015, and it seems schools will reap the rewards of recreational and medical marijuana taxation. The state has an allotment dedicated to school construction capital.
As a result of complete marijuana legalization, the state has put a reasonable chunk of collected cannabis taxes into the fund. After just five months, the funds collected as a result of the state’s marijuana-funded excise tax have already surpassed the amount realized in 2014.
Colorado lawmakers put in place three types of taxes on recreational cannabis: a 15% tax on wholesale cannabis transfers, a 10% special plant sales tax and the state’s standard 2.9% sales tax. The excise tax in particular has grown substantially in the first months of 2015. In March, the tax collected $2.5 million, which grew to $3.5 million in May. The total excise tax collected through May equals $13.6 million. This figure is already higher than the 2014 annual total of $13.3 million.
The new tax data shows that recreational sales have plateaued during spring 2015. Retail sales have not fluctuated significantly between the months of March and May. Sales totaled between $42.4-$42.7 million, with May’s total equaling $42.5 million. However, medical cannabis sales in the state were at an all time high since October 2014, reaching $32.4 million.
When Amendment 64 found its way to the Colorado ballot in 2012, voters were promised $40 million in taxes that would go toward schools. This aspect of the bill served to convince many individuals who were undecided about recreational cannabis legalization.
While this number may have seemed a bit of a stretch in the beginning, it now seems like an achievable goal. If future monthly numbers continue to match May’s record-breaking figures, the state’s tax could bring in as much as $38 million dollars. Conservative estimates put that total at a respectable $25-$30 million.
Pat Steadman, a Democratic state senator stated,
“When we talk about $40 million for school construction, I knew that was a number they’d need to grow into. But it looks like we’re going to grow into it, and that’s a good thing, because I’m promoting the passage of Proposition BB.”
In November 2015, voters will return to the polls to decide the fate of the tens of millions of cannabis tax dollars from the most recent fiscal year. If Colorado’s residents say yes to Prop BB, the state will keep the money and put it towards law enforcement, school construction, substance abuse, prevention and youth services. If they vote no, around $60 million will be returned to cannabis businesses and customers through a sales tax reduction on recreational marijuana.
Colorado continues to set records for the amount of cannabis that it sells through legal shops and dispensaries — and the volume of tax revenue that it collects as a result.
In February, more than $39 million worth of recreational cannabis was sold in the Centennial State. This beat the previous record, set in January of this year, by nearly $3 million. Growth has been steady; in January 2014, the first month of legal recreational use, about $14.7 million was generated from pot sales.
This increase is attributed to additional retail shops that have been appearing in cities like Aurora, located just east of Denver, which began selling recreational cannabis last October. Statistics haven’t been released regarding the demand at individual shops and dispensaries, so it’s impossible to say how much of the growth in sales is the result of recently opened retail outlets serving new customers and what portion is an increase in demand by existing users.
While sales of recreational cannabis continue to climb, medical consumption has actually decreased somewhat since the state’s recreational law went into effect.
Medical Sales Declining
During the era of recreational legality, medical pot sales peaked at $36 million in February 2014, more than a year ago. That record was nearly $7 more than was sold one year later in February 2015, when medical sales totalled $29.3 million.
The decrease in medical sales is attributed by some observers to the fact that eligible patients must register with the state. With consumption of any type illegal at the federal level — and individuals and dispensaries in states like California and Washington continuing to be busted by the feds — the risk of having one’s name in a government database is believed to be pushing the state’s pot patients to instead pursue recreational herb, which doesn’t require such registration.
This could obviously have a major impact on Colorado’s medical dispensaries, which, like any business, must generate enough revenue to remain profitable and keep their doors open.
Overall Upward Trend
These numbers all point toward a bright 2015 for Colorado in terms of tax dollars collected. Unless trends change dramatically, the state will sell more cannabis in 2015 than 2014. Which will, of course, benefit public schools and other services.
In January of this year, Colorado schools received $2.3 million from recreational sales, generating media headlines across the nation. In February, schools collected $2.1 million. At this rate, the state’s school system will likely receive an infusion of more than $25 million during the year from the sale of marijuana.
In 2014, Colorado sold more than $700 million worth of cannabis ($386 million for medical and $313 million for recreational). With 2015 projected to be an even bigger year for the state’s pot business, it’s no wonder that so many other states — even conservative ones like Arizona, Ohio, and Michigan — are seriously considering legalizing medical and recreational marijuana in an effort to decrease law enforcement expenses, generate much-needed tax revenue, and eliminate the criminal element that’s ingrained in the black market.