How Much Money is Colorado Making Off the Marijuana Gold Rush
Since Colorado legalized the recreational sale of marijuana, we’ve all been watching and waiting to see what’s going to happen. While some people thought we’d see a live reenactment of the movie Half Baked, others were more optimistic and figured the substance would remain within the marijuana-using culture. Those in the latter group thought things would remain pretty much the same as before the green substance was legalized, only that Colorado would be able to profit from it and people would be legally allowed to use it.
According to a report by the Colorado Department of Revenue: “There are an estimated 485 thousand adult regular marijuana users who consume marijuana at least once per month. This represents 9.0 percent of the 2014 forecast population in Colorado of 5.363 million residents (all ages).” Heavy users consume much larger quantities than light users, who consume doses that are one-third that of their heavier-using counterparts.
Because medical marijuana has been legal for quite some time — long before the state legalized the drug for recreational use — some users have been buying the substance with a prescription when perhaps they should be buying it from a regular retail shop. These users are benefiting from lower tax rates.
Medical marijuana is used to treat a wide variety of conditions. According to United Patients Group, a resource for alternative medicine, such conditions range from serious conditions like HIV and lymphoma to minor ailments like diarrhea or writer’s cramp.
Some of these conditions are short-lived or temporary conditions, and these users who have improved may make the switch to recreational pot if they still want to use the substance. Then, of course, there are always those few who take advantage of the system.
“[S]o long as it remains relatively easy to get certified — thanks in part to constitutional language – [head of the Colorado Department of Public Health and Environment Dr. Larry] Wolk believes there may not be much incentive for people to get off the medical program. And if so, the long-term tax revenues from retail pot may end up being much less than promised,” The Denver Post said in a July editorial.
What Do Sales Look Like?
July’s tax revenue data just came out, and during that month, the state earned $838,711 in medical marijuana tax revenue. Based on the medical marijuana tax rate of 2.9 percent, we can see that the state earned $28.92 million from selling medical marijuana.
As far as recreational marijuana goes, Colorado earned $2,970,183 from retail via its 10 percent pot sales tax. This means the state’s recreational sales of $29.7 million were higher than its medical sales and also higher than in months past. This is a significant finding, as it shows real potential for a successful transition from medical-only legalization to potential long-term profitability in recreational legalization, as well.