Colorado has become a test tube of sorts for the legalization of marijuana. Americans are watching from afar, as Colorado brings in millions of dollars in tax revenue for their state each month.
“From the single month of January 2014, the city of Denver is expected to receive 3.5 million in tax money generated from recreational and medicinal marijuana sales that will not be wasted. Many are speculating on what the city will choose to do with the several millions of dollars in extra tax revenue created by the marijuana industry in just a few months,” writes Sarah Gallagher of Liberty Voice.
When Colorado passed into law Amendment 64 in 2012, taxes on marijuana were undecided at the time. That all changed when recently, voters passed a 15-percent excise tax on top of regular sales taxes, which increases the price of marijuana as much as 22-percent. “That is not easy on the wallet, but obviously consumers in Colorado are willing to pay these taxes without second thought. After all, they are the ones who enacted the high taxes to begin with,” wrote Gallagher.
This may be true, but as recently as April, many Coloradans where convinced that the tax amount was unconstitutional and should only be taxed “in a manner similar to alcohol.” Activists claimed alcohol taxes were significantly lower than marijuana taxes and took action by filing a lawsuit.
It has been projected that by the end of this year, the city of Denver could see as much as $40 million in tax revenue from the sale of recreational marijuana alone. Many people are worried that this tax surplus could be wasted, which is why originally tax revenues generated were set to be spend on school construction.
“One area that is in need of immediate, unwavering attention is the ongoing regulation of the marijuana industry in Colorado. In a proposal last week, Denver Mayor Hancock suggested that this is where over half of the extra tax money will go. Just because it is legalized, does not mean that the market for marijuana sales is now an entrepreneurial free-for-all that wastes Denver tax dollars. Funds reserved for regulating recreational marijuana sales would go towards hiring administration for the marijuana industry such as tax auditors, fire safety experts and health inspectors to oversee the manufacture of edible marijuana.”
Youth marijuana prevention has become an important effort among law enforcement, because Colorado doesn’t want a correlation between legalization and increased usage among youth or any group to be drawn.
Only time will tell where, when and what the money will be spent on.
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