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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.

Continued Decline in Cannabis Sales Threatens Small Businesses, Tax Revenues

MIG Press Release


DATE: December 14, 2022

CONTACT: Madeleine Schmidt, 405-822-0533

Continued Decline in Cannabis Sales Threatens Small Businesses, Tax Revenues

Record Low Cannabis Sales Continue to Put Small Businesses, Jobs, and Cannabis Tax Money at Risk

DENVER – Recreational and medical marijuana sales numbers released yesterday by the Colorado Department of Revenue showed continued, steep sales declines for marijuana. The drop in sales means the State of Colorado is on track to collect $100M less in tax revenue from marijuana in 2022, threatening critical public programs that marijuana businesses help fund.

Numbers released Monday showed $142 million in marijuana sales for October, the most recent data. That’s a 19.5% decrease in sales from October in 2021. Marijuana sales have now declined consistently for more than a year, forcing layoffs and endangering a critical source of tax revenue for the state as well as the businesses that provide them. The state collected $24.5 million in cannabis tax revenue in November, compared with $32.9 million in November of last year, a 25.5% decrease.

“The hundreds of small business owners that make up Colorado’s cannabis industry are being pushed to the brink with a continued decline in sales and ever-increasing taxes and regulations that make it incredibly difficult to keep their doors open,” said Tiffany Goldman, board chair of the Marijuana Industry Group. “Unfortunately, we have been hearing from our members that they are facing layoffs if this troubling trend continues, putting thousands of good paying jobs at risk. Not only that, but with this projected $100 million decrease in tax revenue, we will see real impacts on projects and initiatives that are funded by cannabis revenue, from housing to mental health to education. Moving forward, we need to oppose burdensome regulations and tax increases that put small businesses at risk.”

While regulated cannabis sales are hitting record lows, online hemp producers continue to sell highly intoxicating products with no significant health and safety regulations and no ID requirements to verify the age of the consumer. The Intoxicating Hemp Task Force created by Senate Bill 22-205 has been meeting since July to create recommendations for regulations to the State Legislature regarding intoxicating hemp products.


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 : Madeleine Schmidt

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