Colorado is facing its biggest vote on pot law since last year’s landmark decision to legalize the drug. When all is said and done, tokers should expect to pay more for their bud.
That’s because most signs suggest voters will approve a proposal to levy two new taxes on the marijuana business when they go to the polls Nov. 5. That would include a 15 percent excise tax on pot sales and an additional 10 percent sales tax. Tax proponents say this would ultimately add about 22 percent to the retail cost of weed in Colorado.
Beer, by comparison, is taxed at 8 percent per gallon, a point opponents of the ballot initiative say shows the cannabis taxes are an overreach. Though small, opposition groups have grabbed headlines by staging protests with joint giveaways.
“Our alcohol system is regulated just fine with the taxes they have, so we don’t see any need for this huge grab for cash from marijuana,” said Miguel Lopez, volunteer coordinator for the opposition campaign.
Still, polls show the tax measure winning broad support among voters. A survey from early October shows 60 percent of voters say they would definitely or probably vote for the initiative. Only 25 percent say they’ll vote against it.
The strength of the support is striking, considering the size of the levies and Coloradans’ usual aversion to tax increases. But in many ways it’s simply an extension of Amendment 64, the constitutional provision that voters adopted last year to legalize weed.
“I think most people have the idea that Amendment 64 is already here and marijuana is legal, but now it’s a matter of how we’re dealing with it,” said Joe Megyesy, spokesman for the pro-tax campaign. “So I think even folks who disagree with Amendment 64 will still vote for [the tax increases] because they want to make sure there’s enough money to regulate marijuana properly.”
If the tax initiative passes, revenue raised by the 15 percent excise tax will go toward school construction while money generated by the 10 percent sales tax will pay for marijuana enforcement.
State officials and backers of the plan hope to raise millions in revenue, but there are no solid figures on how much it would bring in. And opponents worry high taxes could backfire, preserving the black market and its lower prices.
Another state with legalized recreational marijuana has even worse problems. Compared to Washington, Colorado’s coming tax burden is nothing.
compared to the levies enacted by Washington voters when they legalized last year. That state mandates 25 percent payments at each of three stages between growers and customers, plus the standard 8.75 percent sales tax. All together, that adds up to a 58 percent price hike – possibly enough to drive many smokers back to Craigslist and the street corner.