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Where Does Colorado Cannabis Tax Money Go?

Colorado Cannabis & The Federal Tax Code

MIG's 2023 Bill Tracker is Live

Keep track of the latest at the Colorado state legislature.


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.

Lawmakers Introduce Bill to Rein In Intoxicating Hemp Market, Protect Public Safety, Prevent Youth Access

The completely unregulated, untaxed industry generated $500 Million in mostly online sales in 2022

DATE: Monday, April 10, 2023
CONTACT: Erin McCann Ciani

Lawmakers Introduce Bill to Rein In Intoxicating Hemp Market, Protect Public Safety, Prevent Youth Access 

Under current law, intoxicating hemp products require no ID, product or purchase limits, or safety checks

The completely unregulated, untaxed industry generated $500 Million in mostly online sales in 2022

DENVER – Friday, Colorado lawmakers introduced Senate Bill 271 sponsored by Senator Kevin Van Winkle (R-Highlands Ranch) and Senator Dylan Roberts (D-Avon) to take critical action to rein in the intoxicating hemp market, which is selling hundreds of millions of dollars in completely unregulated, untaxed products annually without ID checks, purchase limits, or safety restrictions. Under current law, kids can purchase these products, often shaped like popular candy, online and have them shipped anywhere or even pick them up at a local gas station or grocery store. 

Senate Bill 271 currently requires that any hemp product with more than 2.5 mg of THC be regulated, meaning it will require a legal ID to purchase and be sold at a dispensary rather than online or at a convenience store, however this number will likely be reduced. It also gives authority to the Colorado Department of Public Health and Environment to regulate potentially intoxicating cannabinoids, including creating public safety rules for packaging, labeling, and appropriate tracking. 

Colorado’s Intoxicating Hemp Task Force, created by Senate Bill 22-205, recently submitted recommendations for regulations to the State Legislature at the beginning of this year. While the state task force recommended that full spectrum hemp products with up to 2.5 mg of THC per serving be unregulated, meaning they can be sold anywhere, with no purchase limits, age requirements, or safety checks, lawmakers strongly believe this THC limit was too high. The task force also failed to recommend per package limits, meaning anyone of any age could purchase large packages containing an unlimited amount of servings, each at 2.5 mg of THC.

“We are very thankful for the important work the Intoxicating Hemp Task Force completed to investigate this issue and provide us with recommendations for legislation, and it’s a great starting point,” said Senator Van Winkle. “In the interest of preventing youth access and ensuring public safety, however, we believe we need to institute a lower THC limit, create per package limitations, and require testing and labeling requirements just as we would with cannabis products. We look forward to working with all of the interested stakeholders on this legislation and are confident we can develop a bill that will keep communities safe.”

Although harmless in its natural state, when hemp is concentrated into delta-8 and other cannabinoids, it can be infused into intoxicating gummies, vapes, and other products. According to the FDA, more than 100 reports of adverse health events related to hemp intoxicants were reported in just 14 months. Representatives of the hemp industry presented an industry sponsored study indicating that the hemp intoxicants industry would sell $527.3 million in sales of Delta-8 drugs in 2022. 

“When online intoxicating hemp purveyors are selling in the hundreds of millions and by the kilo, sadly it’s easy to see how so many of these untested, unregulated products are getting into the hands of children and making their way to the illicit market,” said Tiffany Goldman, Board Chair for The Marijuana Industry Group. “I am a cannabis business owner, but I’m first and foremost a mom. I can tell you, that while of course there is a business parity issue here, my number one priority is ensuring the health and safety of all Coloradans, especially our kids. Cannabis small business owners pride ourselves on having an excellent record on preventing youth access, and I strongly believe intoxicating hemp products should be regulated just like cannabis products. Why wouldn’t they be? I am pleased that lawmakers are taking action to regulate this industry, however, 2.5 mgs of THC is just too high, and we need THC package limits in this bill to ensure the health and safety of our kids and our communities.”

Under current law, the sale of intoxicating hemp products online requires no ID checks, purchase limits, or safety and quality checks and can be shipped anywhere. For example, any consumer of any age can purchase a “Nerd Coil” that resembles a popular child’s candy containing 1000 milligrams of Delta-8 THC– 100 times the legal serving size limit in Colorado for Delta-9 edible THC products.  A recent opinion piece in the Journal of the American Medical Association called out the dangers of unregulated hemp-derived cannabis products, calling their regulation “a public health priority. 

Contrast that with legal marijuana products that are tracked from seed to sale, are consistently tested for safety and purity, cannot resemble children’s products or be sold near schools, and can only be sold in limited amounts. All purchases require a valid ID to be checked twice, and the industry currently has a 98% compliance rate. The legal cannabis industry has also generated hundreds of millions of dollars for causes Coloradans care about like public safety, affordable housing, mental health and substance abuse treatment, and education.


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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