The movement to legalize cannabis in Colorado was initiated for many reasons. Thousands were being tossed into jail, costing law enforcement millions, people were fed up with the state criminalizing use, and it was argued legal marijuana would pump cash into the economy. Those people who made those arguments as they lobbied for legalization have a reason to light up in celebration as calculations by The Cannabist show nearly $700 million in cannabis profits in 2014.
Those figures will go towards education and health care, providing much needed cash to educate children and take care of the sick. These numbers however, have shown a mixed bag of success and failure as estimates of a $70 million tax haul were not met in 2014. With just $44 million collected in taxes, the belief that legal cannabis would allow Colorado to swim in the riches has turned out to be a fantasy not yet experienced, but with legal cannabis reaching its one year anniversary the opportunity to reach the tax estimate is there.
In January state wide profits reached just $1.6 million, by December the monthly figures climbed past $5 million. The reason is simple; red tape, and hesitation from counties to allow pot shops to open their doors. To open a store a potential owner must pay upwards of $24,000 in state and local application fees, on top of other fees, if he or she lives in a town or city that wants legal stores.
In Lakewood, Colorado, voters chose against opening retail outlets that sell marijuana, joining hundreds of towns and cities in choosing not to open cannabis retail stores. With Proposition 64 municipalities are allowed to decide zoning regulations, local taxes, or not open stores at all. With hundreds of areas not opening the shops, the tax income supporters of the proposition expected, has not arrived.
The lack of full support for legalization is not the only reason why the tax estimate wasn’t met.Recreational users can pay up to four different taxes when they purchase marijuana. An excise tax, two different sales taxes and a city tax drives up the price. Recreational users have to make a choice; pay more for convenience at a legal and regulated proprietor, or contact their loyal dealer who provides the plant to them for the regular, least expensive price.
Only 60% of marijuana purchased in Colorado comes from licensed retailers, the rest is purchased by street dealers who sell off surplus weed they manufacture for medical purposes. The inability to extinguish the black market has given critics of legal weed ammunition to continue their fight against the changing opinions of marijuana.
Although taxation has not given the results many hoped for, legalization in Colorado has brought many positive changes to the state. Since legalized cannabis traffic fatalities have dropped, and marijuana usage among teens has declined.
Cannabis legalization in Colorado was never going to be an immediate success, Kinks have to be worked out, more towns and cities will eventually jump on the bandwagon and allow individuals or partners to open up stores, but to use the failed estimate as an example of why legalization will never work is equally flawed. High taxes, long red tape, and the lack of state wide support has prevented Colorado from completely destroying the idea that prohibition is failed policy.
The current example set by Colorado is when government gets too greedy, or obstructive, a potentially valuable industry is stifled. The opportunity to reduce state and federal debt through legal cannabis is there, but when the big hand of government reaches too deep the benefits of economic opportunity is not fully accomplished.
