Among the reasons I supported Amendment 64 was the provision that the first $40 million of tax revenues each year would go toward school construction projects. There are schools in our state that need it, and I liked the tie-in to education. What I and many others who voted yes didn’t count on was a mechanism in the Taxpayer’s Bill of Rights that might keep those funds from getting anywhere close to an institution of learning.
In 2013 voters approved Amendment AA, which allowed the state to collect sales and excise taxes on cannabis. Under TABOR, the state has to provide an estimate of how much revenue any new tax will bring in the first year. The state was pretty close in its estimation of the first year’s cannabis numbers, but it was off on its guesstimate for the overall state budget, as it turns out, by about the amount of revenue the marijuana tax brought in.
That dictated that $66.1 million be returned to taxpayers. After it found the discrepancy, the state legislature passed House Bill 15-1367 that put this measure on this year’s ballot. The state is asking that it be allowed to keep that money for school construction, law enforcement education and other programs rather than refund $24 million to growers, $17 million to dispensaries and customers via a temporary reduction in the sales tax rate, and $25 million to taxpayers, who would on average get an $8-credit on their 2015 tax bill. The share that city and local governments that allow retail sales get from the state would be cut from 15 percent to 7 percent.
This comes at a time when marijuana tax revenues are breaking records almost every month in Colorado. August is the first month that total sales broke $100 million; $59.9 million in recreational, $41.4 million medical and $13 million in taxes, licenses and fees. And revenues have generally outdistanced the previous month. Total sales of medical and recreational marijuana was $699,108,805 in 2014. Total sales through August of 2015 were at $639,941,036, which means that the state probably exceeded the 2014 figures last month.
I think state and city marijuana taxes are too high, and cannabis regulations are a work in progress. The state’s 10 percent special tax is scheduled to be reduced to 8 percent in 2017, and I hope we’ll see more reductions in coming years. Still, since this was the intent of Amendment 64, I’m recommending a yes vote on BB.
A lot of national and international headlines have trumpeted the fact that marijuana tax revenues are now significantly higher than alcohol revenues in Colorado. While perhaps somewhat interesting, it’s not really that surprising. Currently, weed taxes include the standard 2.9 percent state sales tax, the additional 10 percent special tax and a 15 percent excise tax on wholesale marijuana. Alcohol is taxed at much lower rates: Six cents per gallon of beer and 60 cents per liter of spirit alcohol. You’d have to drink a lot of beer to make alcohol more profitable than cannabis for the state.
Cannabis sales in states that now allow recreational sales are doing well. Oregon got off to a healthy start, with retail sales reported at an estimated $11 million in the first week. Again, headlines blare that that’s more than double the $5 million worth of recreational marijuana sold in Colorado the first week it was legal here.
But the really big difference is there were about 40 stores open here when sales began in January 2014. More than 200 outlets were available in Oregon last week, almost half of those in Portland, where medical outlets are selling to adults until the state gets its retail operation online. That’s more than four times as many outlets, although customers are limited to a quarter ounce of bud and no edibles at present.
Finally, I’ll be hosting a forum on Boulder’s cannabis issues from 6-9 p.m. Friday evening at eTown Hall, 1535 Spruce Ave. Council is currently taking up changes in its marijuana rules, so this will be a chance to hear what current and hopeful Council members feel about cannabis regulation in our city and meet some of the people in the industry, too.
I’m told at least 10 Council candidates will be present, so this will be a good opportunity to see the current crop of Council wannabes in the flesh. No matter how you feel about cannabis, growth in Boulder or the current Council lineup, make your voice heard by voting. If you’re complaining and not voting, whatever happens is your own fault.
You can hear Leland discuss his most recent column and Colorado cannabis issues each Thursday morning on KGNU. http://news.kgnu.org/weed