Where does all the marijuana money go? Colorado's cannabis taxes, explained

Ever since Colorado legalized recreational cannabis there’s one perennial question that everyone always asks. Where is all the tax revenue from marijuana sales going? Depending on where you live, the questions may get a bit more specific: If schools get pot money why do they continue to hurt for cash? Are school buildings getting fixed? Why is my town or county seeking tax hikes, aren’t government budgets pot plush? What do we get for our tax money? Where is it ending up? In short, there’s a lot of questions.

Despite the fervor, marijuana isn’t the big green budget bandage that many envisioned. That’s not to say that the state isn’t making money on the deal, but, like many taxes, it’s not a cure-all that balances the checkbook.

How much is marijuana taxed in Colorado?

Colorado’s recreational marijuana tax rate increased in 2017 to 15 percent, up from 10 percent, where it had been parked since legalization in 2014. That’s the rate you pay when you’re checking out at the dispensary. Before it even gets to you, recreational marijuana is also subject to a 15 percent excise tax, which is triggered each time the product is transferred from a production facility to a dispensary.

A receipt from a Denver dispensary that shows the various local taxes applied to any cannabis purchase within city and county limits.

A receipt from a Denver dispensary that shows the various local taxes applied to any cannabis purchase within city and county limits.

There’s a state sales tax of 2.9 percent that only applies to medical marijuana, another change made in 2017. Medical marijuana doesn’t get hit with an excise tax before it arrives on shelves, which is why prices at the register tend to be lower for medical marijuana cardholders.

On top of that, all cannabis sales — medical or recreational — are subject to local taxes. Districts throughout the state can collect sales tax on marijuana. For example, most people who live in the Denver metro pay an additional 1 percent tax on sales of very specific items, including marijuana, to fund the Regional Transportation District. Marijuana-purchasing Denverites also support the Scientific and Cultural Facilities District.

What else do marijuana taxes pay for on the local level?

It depends on where you live! Aurora, for example, has used marijuana tax money to create The Aurora Day Center, a place for homeless people to go during the day It’s part of the city’s larger $1.5 million investment in combatting homelessness, courtesy of Aurora’s cannabis consumers. For the third year in a row, Pueblo has used marijuana tax money to fund scholarships, doling out $634,000 to 563 students so far in 2018. There are limits on marijuana taxes that can be levied locally.

Like Pueblo, Adams County had been using marijuana tax revenue to fund scholarships for underprivileged students. But the county’s voter-approved tax on recreational marijuana that targeted three specific cities was later found unconstitutional. The county may have to pay the money back.

Oringal Article by 420intel

Victor MadrilComment