The state of Colorado has taken in more than $1 billion in taxes and fees since legalizing medicinal and recreational marijuana, according to the Colorado Department of Revenue.
The $1.02 billion in revenue is based on cannabis sales of $6.56 billion between 2014 and April — $4.46 billion in recreational pot sales and $2.1 billion in medical marijuana sales, CDOR said in the latest of its regular reports on pot revenue.
The report “continues to show that Colorado’s cannabis industry is thriving, but we can’t rest on our laurels,” Gov. Jared Polis said in a statement. “We can and we must do better in the face of increased national competition. We want Colorado to be the best state for investment, innovation and development for this growing economic sector.
“This industry is helping grow our economy by creating jobs and generating valuable revenue that is going towards preventing youth consumption, protecting public health and safety and investing in public school construction,” Polis added.
Colorado has 2,917 licensed marijuana businesses, and 41,076 individuals are licensed to work in the industry, CDOR said.
The taxes reported are those paid to the state and do not reflect taxes collected by local governments that allow marijuana dispensaries in their communities.
Colorado Springs and El Paso County have banned the sale of recreational marijuana. Manitou Springs, however, has OK’d two retail shops from which it collects tax revenues that have helped fund municipal improvements.
Medical marijuana is taxed at 2.95% (the state sales tax) plus whatever local taxes are assessed; recreational marijuana is taxed at 15% as a “special sales tax” set up in 2017, plus local taxes where applicable.
The excise tax on marijuana, as approved by voters under Amendment 64, has brought in more than $194 million in the last five years for the state’s K-12 Building Excellent Schools Today (BEST) construction fund.
Another $69 million in excise taxes has gone to the state’s Public School Fund, which handles investments. Another fund for constructing schools has received nearly $20 million over the past five years.
By far, K-12 education has been the biggest beneficiary of marijuana taxes, with about 42% going to education, state data show. Another 29% went to substance abuse treatment, public health and safety and diversion programs and 6% for marijuana regulation. Local governments took 8% out of the 15% recreational special sales tax.
But education proponents such as Great Education Colorado, which advocates for public education funding, differ on just how much benefit marijuana taxes have been to Colorado’s public schools.
Great Education said that marijuana taxes have not been a panacea for general public education funding.
“From the day that Proposition 64, legalizing the sale of marijuana, passed in 2012, a myth has taken hold in Colorado that marijuana taxes have solved Colorado’s school funding crisis. Nothing could be further from the truth,” said Lisa Weil, the organization’s executive director.
“While marijuana excise taxes have funded about $40 million per year in critical capital construction projects and other marijuana revenues have been used for grants to schools for such priorities as bullying prevention and health professionals, no marijuana funds go to the ongoing day-to-day operation of the schools,” Weil said.
“While the marijuana revenues have been helpful in addressing some small corners of Colorado’s $15+ billion school capital construction backlog, it has not touched the underlying, chronic underfunding that has given Colorado the dubious distinction of ranking 42nd in school funding and dead last in teacher wage competitiveness,” Weil added.
Brian Vicente of cannabis law firm Vicente Sederberg sees it another way.
“Amendment 64 has clearly fulfilled its promise of raising significant new revenue for school construction projects,” he said. “We were never under the illusion that legalization would be a fiscal panacea, but we knew it would have a substantial and positive impact. Funds are being used on everything from building schools to hiring school health professionals and paying for bullying prevention programs.”
Mason Tvert, referred to recently by Gov. Jared Polis as the “godfather” of legalization of marijuana in Colorado, added that “generating tax revenue is not the only reason or even the best reason to regulate cannabis.”
Tvert co-directed the Amendment 64 campaign and now serves as vice president of communications at VS Strategies, Vicente Sederberg’s public affairs consulting affiliate.
He also noted that “when those revenues start adding up to more than $1 billion, as they have in Colorado, it’s a pretty attractive bonus. It’s crazy to think how much money states are flushing down the toilet by keeping marijuana in an illegal market.”