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A thriving marijuana plant is seen at a grow operation in Denver, Colo., Dec. 31, 2013. (REUTERS/Rick Wilking) A thriving marijuana plant is seen at a grow operation in Denver, Colo., Dec. 31, 2013. (REUTERS/Rick Wilking)  

Colorado’s pot tax revenue much higher than expected

Greg Campbell
Contributor

Sales tax revenue from Colorado’s recreational marijuana is expected to crush previous expectations by nearly $30 million annually, according to projections from Gov. John Hickenlooper’s office.

On Wednesday, Hickenlooper outlined how his administration would like to spend an estimated first-year windfall of $99 million in sales tax revenue, which is derived from a 10 percent tax on retail pot.

When voters approved the taxing scheme in 2013, sales taxes were only estimated to produce $70 million in annual revenue.

The new estimate of how valuable marijuana sales will be to the state comes after just seven weeks of retail sales and with more retail businesses opening every month. The numbers are independent of a 15 percent excise tax, the first $40 million of which is earmarked for school construction.

In a letter to the chairman of the Joint Budget Committee, Hickenlooper is asking for $45.5 million toward youth marijuana use prevention; $40.4 million for substance abuse treatment; $12.4 million toward public health; and $5.2 million toward law enforcement, regulatory oversight and coordination activities.

The state legislature must approve the allocations.

But some of those who worked to pass Amendment 64 say Hickenlooper’s priorities are still skewed toward portraying marijuana as an especially dangerous substance. They would like educational efforts to also include comparisons of marijuana to more dangerous legal substances like alcohol and tobacco so that young people can make informed decisions when they’re old enough to drink and legally buy marijuana.

“Gov. Hickenlooper’s proposal flies in the faces of voters who expected marijuana to be treated similarly to alcohol,” said Brian Vicente, co-director of the Yes on 64 campaign, in a press release. “Voters approved Amendment 64 because they wanted to put an end to government-run anti-marijuana campaigns, not to fund new ones. The governor should explain why he feels all of these new marijuana-related programs are necessary when the health and safety of teens are threatened to a much greater degree by alcohol use and prescription drug abuse.”

Hickenlooper has long been held to be two-faced when it comes to marijuana legalization, which he opposed, because he made his fortune running a popular brewery in Denver before entering political life.

“How can the governor justify focusing our state’s limited drug education and prevention resources on a substance that is less harmful than one he made a fortune selling?” asked Mason Tvert, the communications director for the Marijuana Policy Project, in a press release. “Any new marijuana education efforts should include a discussion of the relative harms of alcohol and prescription drugs. We support efforts to educate people about marijuana and prevent use by minors, but not when they are as myopic and wasteful as those proposed by the governor’s office.”

In his letter to the JBC, Hickenlooper wrote that funds from marijuana sales should be directed toward programs that have a “direct or indirect relationship to marijuana use,” but that they shouldn’t create the impression that the government is encouraging or promoting it.

His critics, however, say the approach is too cautious.

“We have an incredible opportunity to chart a new course in the state when it comes to teen substance use and abuse,” Vicente said. “We hope the legislature will approach this issue more thoughtfully than the governor has.”

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