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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: Once a Pioneer in Cannabis Policy, Falls Behind in the Pack of States Legalizing Recreational Use

MIG Press Release

DATE: Thursday, October 26, 2023
CONTACT: Erin McCann Ciani

Colorado: Once a Pioneer in Cannabis Policy, Falls Behind in the Pack of States Legalizing Recreational Use

Recently Released DOR Numbers Put Into Perspective a Desperate Need to Re-evaluate Colorado’s Purchase Limits on Recreational Marijuana

DENVER – Recreational and medical marijuana sales numbers recently released by the Colorado Department of Revenue showed a continued, sharp decline. Numbers showed $132 million in marijuana sales for August 2023, the most recent data, down from more than $150 million in sales in August of 2022. That’s a 13% decrease for marijuana sales from August 2022 overall, including a 11.6% year over year decrease in recreational sales and a 22.1% decrease in medical sales.

This 25 month continuous sales decline also impacts state tax collection. Colorado collected 16.5% less in cannabis tax revenue in September 2023 versus September 2022, putting at risk critical public state and local programs that marijuana businesses help fund including housing, mental health, public safety, and education.

While Colorado allows local municipalities to set purchase limits, state law says adults 21 and older are limited to purchasing up to 1 ounce of retail marijuana at a time. As other states legalize marijuana, they are giving consumers greater purchasing power. In nearby New Mexico, where recreational marijuana was legalized in 2021, adults 21 and older can purchase up to 2 ounces of marijuana flower, 16 grams of concentrate, and 800 milligrams of edibles. In New York, where recreational marijuana was legalized in 2022, adults 21 and older can purchase up to 3 ounces of cannabis and up to 24 ounces of concentrated cannabis for personal use.

“As other states come online, Colorado continues to fall behind the standard and norm for purchasing limits, and our sales and state tax revenue are reflective of that” said Truman Bradley, Executive Director of the Marijuana Industry Group (MIG). “If our elected officials want Colorado to continue to lead the way on marijuana and cannabis policy, we need to seriously consider a regulatory update that would align our purchasing power with other states. This, along with streamlining the way the government taxes cannabis small businesses, will prevent Colorado cannabis small business owners from closing their doors and laying off their workers, tens of thousands of which are employed by this industry.”

Cannabis sales were down over $460 million in 2022, compared with 2021, and 2023 sales are on track to be down even further than 2022. Over the last three years, sales have fallen 41%. According to the Vangst 2023 Jobs Report, Colorado lost 10,481 cannabis jobs last year.


Additional Info

Media Contact : Erin McCann Ciani

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