Weed shops produced more than $2 million in tax revenue for the State of Colorado in January, according to figures released in March.
The $2.01 million collected by the state from Jan. 1 to Jan. 31 reveal the recreational pot industry did $14.02 million in business that month. The money was generated by a total of 59 shops, the first 24 of which opened their doors New Year’s Day.
Voters in Colorado and Washington State legalized recreational weed in 2012. Colorado’s stores were the first to open for business; shops in Washington should open this spring.
Colorado collects a regular 2.9 percent sales tax, a special 10 percent sales tax on pot, and a 15 percent excise tax on pot. When licensing fees and taxes from the state’s MMJ industry are factored in, the state collected $3.5 million from weed in January.
That’s nothing compared to the state’s overall $20 billion budget, but once 2014 is out, it could add up to a significant chunk of money. Still, the revenue collected so far puts the state behind its own previous estimates for this year.
Colorado officials have said they expect to collect about $190 million off all marijuana in the first half of 2014. If the industry maintains January’s pace, the state would get just $84 million. Opponents of recreational marijuana jumped on the discrepancy.
“It appears that Colorado is falling well short of the state’s revenue projection from marijuana sales,” Kevin Sabet, a high-profile anti-drug activist, said in a press release. “Instead, the number from January is less than $2 million, far below estimates claimed by both the Governor and legalization advocates.”
But it’s not clear that that’s true. Gov. John Hickenlooper and other state officials never made claims about January revenue specifically. In fact, when the month’s figures were released, officials said they jibed with expectations. More importantly, that month saw only the first wave of new pot shops.
Currently there are about 160 licensed recreational weed shops in Colorado, and even more will open in coming months. The revenue they generate will likely continue to grow, in line with state predictions.
Politicians are already debating how to spend the new tax revenue. Hickenlooper has sent lawmakers a $134 million proposal that would spend the money on anti-drug messaging for kids and advertising to discourage drugged driving. Police also want some of the money.
“The whole world wants to belly up to this trough,” said Sen. Pat Steadman, who serves on the legislature’s Joint Budget Committee.