Colorado reports a cool $3.5 million in tax revenues from first month of sales since its legalization in January. USA Today reports that the total comes from both medical marijuana and retail pot, with the recreational variety garnering the larger share at $2 million.
It comes as no surprise that recreational use would bring in the biggest sales. From the pot consumer’s point of view, there’s no need for a doctor’s prescription, no embarrassing admission of real or feigned illness, and no dirty looks from patrons of neighborhood stores near the dispensary.
Big tax revenues are expected to accrue for Colorado. Lawmakers must have planned for big state benefits when they formulated the legislation that would regulate legalized sales.
Here’s how they are making their money: Consumers pay a special 10% sales tax in addition to the standing 2.9% Colorado sales tax on their pot purchases, with the state legislature allowing itself to hike pot tax another 15% in the future. The producers bear a 15% tax burden, which they undoubtedly pass on to their buyers. With pent-up demand smoldering for eons, consumers ran to purchase in January, whatever the price.
The state was the real beneficiary of the smokey pleasures by collecting more tax revenue than was expected in the first month of legalized sales. While subsequent monthly sales are expected to decline, the state legislature thoughtfully wrote in the option to raise the special sales tax even more. The usurious tax rates don’t appear to bother the buyers. Some suspect they are not conscious of it at all.
The state gained fame as the first to allow the legal sale of recreational pot starting on January 1, 2014. Washington is the only other state to legalize sales, but that begins later this year in summer. The other forty-eight can’t be far behind, especially the financially bereft ones such as California.
Get used to it, folks. Coming soon to the state where you live may be the perfectly legal Rocky Mountain high, where government money grows less on trees than it does on a pot plant.