Sate officials the US State of Colorado reported on the tax collected from the state’s legalized marijuana program.
Marijuana smoking became legalized in the state at the start of 2014. In the time span of January and February 2014, the state of Colorado collected about $4.2 Million in sales and excise taxes on recreational marijuana. The amount collected was half of the $5.5 Million to $8.9 Million in taxes that state officials estimated it would collect.
When voters in Colorado approved the recreational use of marijuana, the law included a 10 percent sales tax and a 15 percent excise tax on the wholesale prices of marijuana. In addition, consumers must pay local sales taxes and a 2.9 percent sales tax at the retail level.
Analysts interviewed by Bloomberg Businessweek stated that the low levels of tax collection were due to smokers choosing to remain enrolled in the state’s medical marijuana program, where the tax levied on marijuana is lower. Also, experts believe that many smokers are continuing to buy their marijuana on the black market due to its cheaper price.
Source: Jennifer Oldham, “Colorado Pot Revenue Lags Forecasts as Licensing is Slow,” Bloomberg Businessweek, May 1, 2014.