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Where Does Colorado Cannabis Tax Money Go?

Colorado Cannabis & The Federal Tax Code

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Colorado state tax revenue from the legal cannabis industry surpassed $2 billion in January and the state has collected more than $88.7 million in fees.

In addition to state and local taxes and fees, cannabis businesses have an effective federal tax rate of about 70% – compared to about 26% for other businesses. 

Did you know Colorado legal cannabis dispensary owners are unable to deduct normal business expenses like payroll and rent from their federal income taxes?

Marijuana has contributed over $320 Million dollars to Building Excellent Schools Today (B.E.S.T.), making up about 25% of the program's entire budget.

In FY 21-22 alone, nearly $15.3 million in state cannabis dollars went to state Affordable Housing Grant and Loans.

The Marijuana Tax Cash Fund collected $188.8 Million in FY 2021-22 alone.

In FY 21-22 alone, nearly $15 million in cannabis dollars went to the School Health Professional Grant program. 

More than $15 million in cannabis dollars went to substance abuse treatment in FY 21-22.

More than $1.6 million cannabis dollars went to the Tony Grampsas Youth Services Program in FY 21-22.

Voters in 59 of 64 Colorado counties voted no on Proposition 119 sending a clear message against raising taxes on cannabis consumers.

Unlike other legalized substances, the marijuana industry has a 97% compliance rate for unauthorized sales.

Unlike alcohol, research has proven you can only get “so high.” Cannabinoid receptors in your brain eventually prevent the body from getting further intoxicated.

Did you know? Since legalization in 2005, teen use in Colorado has remained flat and is below the national average.

According to a recent poll by the Pew Research Center, more than 90% of Americans think cannabis use should be legal.

Did you know? MIG represents more than 400 cannabis business licenses across the state.

A 2021 study found that medical cannabis use was associated with clinical improvements in pain, function, and quality of life with reductions in prescription drug use. 

Founded in 2010, MIG is the oldest and largest trade association for licensed cannabis businesses.

Colorado’s marijuana model has become the example for all other regulated cannabis states, and MIG works directly with policy makers to ensure that Colorado’s program is fair, tightly regulated, safe, and successful.

Safe Sales: Every marijuana sale in CO takes place on camera and requires multiple ID checks.

All regulated marijuana in Colorado is tracked from “seed to sale,” with oversight from the Marijuana Enforcement Division.

Established in 2010, MIG has led legislation for child resistant packaging, customer safety resources, and purchase restrictions for 18-20 year olds.

Marijuana is taxed at both state and local levels. This year Aurora built a new $34 Million dollar rec center, fully funded by local marijuana taxes.

The marijuana industry suffers from unfair Federal tax rules, which means that MIG members’ effective tax rates are around 71%.

A 2019 study showed that crime does not increase with legalization.

Conditions for medical marijuana

Cancer - Glaucoma - HIV or AIDS - Cachexia - Persistent muscle spasms - Seizures - Severe nausea - Any condition for which a physician could prescribe an opioid - Autism Spectrum Disorder - Severe pain - PTSD

Most marijuana businesses have access to banks, but because marijuana is still federally illegal, businesses are unable to access merchant processing services such as VISA or Mastercard.

Consuming higher potency marijuana does not lead to higher levels of impairment.
-- Journal of the American Medical Association (JAMA) 2020

71% of Colorado voters favor marijuana legalization. This has increased 10 points in the last four years alone.

Colorado Cannabis Sales Down More than $460 Million from 2021 to 2022, Resulting in Nearly $100 Million Decrease in State Tax Revenue

MIG Press Release

DATE: February 13, 2023
CONTACT: Erin McCann Ciani

Colorado Cannabis Sales Down More than $460 Million from 2021 to 2022, Resulting in Nearly $100 Million Decrease in State Tax Revenue

As Small Businesses Struggle to Stay Afloat Due to High Taxes and Burdensome Regulations, Public Programs Relying on Tax Revenue Suffer

DENVER – Recreational and medical marijuana sales numbers released last week by the Colorado Department of Revenue showed a continued downward trend for marijuana sales, resulting in a major drop in revenue for 2022. Cannabis sales were down $460,305,716 in 2022 compared with sales in 2021.

At the same time, while the state collected $423 million in cannabis tax revenue in 2021, Colorado gained just $325 million in revenue this past year, threatening critical public programs that marijuana businesses help fund, including housing, mental health, and education. Additionally, the state collected $14 million less in revenue in January of 2022 versus January of 2021.

Sales numbers also released Wednesday showed $139 million in marijuana sales for December (the most recent sales data), down more than 17% from December 2021 when sales reached $168 million. Medical sales, in particular, have been taking a hit, dropping 41% in December 2022 compared with December 2021.

“While the drop in sales from 2021 to 2022 seems drastic to those outside the industry, it’s unfortunately very in line with what we have seen over the past few years as we have watched Colorado businesses like Curaleaf leave the state or close its doors,” said Tiffany Goldman, board chair of the Marijuana Industry Group. “Increasing taxes, product limitations, punishing federal laws, and the realities of having to compete with a completely unregulated hemp market are taking their toll on this critical Colorado industry. This significant drop in sales also means thousands of job losses and a significant drop in revenue for causes Coloradans care about like affordable housing, public safety, mental health and addiction treatment, education and more. We need lawmakers to take action to rein in the illegal hemp market, prevent new taxes, and streamline regulations that keep kids safe and business open before it’s too late.”

The Intoxicating Hemp Task Force created by Senate Bill 22-205 which had been convening since July, submitted recommendations for regulations to the State Legislature at the beginning of this year. Online hemp retailers sell highly intoxicating products with no significant health and safety regulations and no ID requirements to verify the age of the consumer. Other states like Washington are beginning to take action to bring regulations for the intoxicating hemp industry in line with the legal cannabis industry.


About MIG: MIG was founded in 2010 by cannabis business owners and supporters who wanted to help craft Colorado’s earliest medical marijuana regulatory framework. MIG is the oldest and largest trade association for licensed cannabis businesses. Comprising approximately 500 business licenses, MIG has strong representation and connections across the state.

Additional Info

Media Contact : Erin McCann Ciani

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