Skip to content

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.

Marijuana Industry Group Issues Following Statement on HHS Recommendation that Cannabis be Moved to Schedule III Drug

MIG Press Release

DATE: Wednesday, August 30, 2023
CONTACT: Erin McCann Ciani

Marijuana Industry Group Issues Following Statement on HHS Recommendation that Cannabis be Moved to Schedule III Drug

DENVER, CO – Today, the U.S. Department of Health and Human Services (HHS) issued a recommendation to the Drug Enforcement Administration (DEA) that marijuana be moved from a Schedule I to Schedule III substance. The recommendation comes after President Joe Biden requested that the Department complete a scientific review of cannabis, which was conducted by the Food and Drug Administration (FDA).

Truman Bradley, Executive Director of the Marijuana Industry Group (MIG), issued the following statement in response to the announcement.

“We are pleased to hear HHS make this recommendation and acknowledge what science has been indicating for years. Schedule I drugs are reserved for products that have “no medical benefit,” which is, of course, inconsistent with the many known medical benefits of cannabis that we have discovered both through research and through the countless stories of Colorado veterans and patients. We are hopeful that the DEA will not only accept this recommendation, but consider descheduling cannabis entirely, because cannabis is clearly safer than other unscheduled substances like alcohol.”

“If the DEA classifies marijuana as a Schedule III substance, the industry will no longer be subject to the outdated and unfair 280(e) tax policies, which have brutally taxed compliant Colorado businesses at a 75% federal tax rate compared to other small businesses. This is of course in addition to state and local taxes. It’s no secret that Colorado’s cannabis industry has been seriously struggling. Ever-increasing taxes and regulations and falling sales have resulted in the laying off of thousands of employees and some small businesses even being forced to close their doors.

“As an industry, while we are excited at this potential relief for our small business owners, we still have many concerns. First and foremost, if the DEA accepts this recommendation of which there is no guarantee although they historically have, cannabis is still illegal federally. This means consumers and patients can still be criminally punished. Secondly, this could potentially now open the door for Big Pharma and other major corporations to take over the industry. The U.S. Attorney General now has 90 days from receiving this recommendation to issue a ruling, and we will certainly encourage Colorado cannabis small business owners, veterans, patients, and consumers to weigh in on this important issue. While overall this is a positive step in the right direction, there is more that needs to be done both at the state and federal level to streamline regulations and protect both small businesses and public safety.”

In Colorado, cannabis sales were down nearly $100 million in 2022, compared with 2021, and 2023 sales are on track to be down even further than 2022. According to the Vangst 2023 Jobs Report, Colorado lost 10,481 cannabis jobs last year.


Powered By GrowthZone