Colorado Set to Reap Huge Profits from Legalized Marijuana
As Colorado’s political policies create the need for more tax revenues, the state’s munchies-for-dollars may have been solved, or otherwise greatly alleviated. Growing marijuana, which has long been a huge cash crop for many Coloradans, is set to become legal in the state. The legalization means the crop can now be taxed.
Amendment 64 to the state’s constitution passed on November 6, 2012 allows the legal sale and consumption of marijuana. Specifically, the amendment known commonly as the Legalized-Marijuana Bill, would allow the drug to be sold to anyone over the age of 21 at retail stores and allow adults to have up to one ounce of marijuana on their person anywhere in the state. The bill outlines plans for funding public schools and other public-works projects. The retail centers would be regulated by the state and state and local taxes would be collected from the businesses. State officials intend to implement licensing standards and excise-taxes.
Some experts and groups have stated the passing of the bill could generate as much as $270 million a year in marijuana sales, with $47 million in tax revenues and huge savings in law enforcement costs.
Critics have indicated some concern over the math being used to promote to bill, in addition to concerns over how the federal government will react to the state’s legalization. The Denver Post’s John Ingold stated:
“But other experts who have examined the issue say it is deeply uncertain how much money the amendment could generate. A dizzying number of factors — the number of stores, the demand, the price, the amount of tax evasion, the federal government's response and even the measure's impact on other industries — go into determining how much new revenue the amendment would create.”
Other critics point to California’s 2010 marijuana-legalization bill and that the bill’s proponents made similar revenue projections that failed to pan out. California placed high levels of taxes on the crop, resulting in a strong black market that has continued to thrive. The black market sales have limited the tax-revenues for the state and local municipalities due to their inability to tax the substance and have cost more in law enforcement measures than proponents claimed.