denver post

Colorado lawmakers are reviewing recreational marijuana taxes after sales from the past fiscal year did not meet early predictions.

The official estimated revenue that recreational marijuana was predicted to bring in $33.5 million through the fiscal year, which ended this summer.

Tax collections from Colorado reveal that the actual amount came in 60 percent lower than predicted, at a little over $12 million, according to The Denver Post.

Lawmakers, such as State Rep. Dan Pabon, the leader of a special legislative committee on marijuana revenue, say that existing medical marijuana tax laws, which are lower than that of recreational pot, may be a part of why recreational tax revenue didn’t meet expectations.

David Blake of the Colorado attorney general’s office suggests that medical marijuana’s continued success and recreational marijuana’s disappointing revenues are driven by the avoidance these higher taxes, The Denver Post said.

Despite the presence of recreational marijuana dispensaries, which are popping up all around the state, medical marijuana sales continue to hold a top place in the marijuana market.

It seems as though recreational marijuana hasn’t taken consumers away from medical marijuana businesses but instead has appealed to tourists and others who may have previously purchased pot illegally.

However, recreational tax revenues are projected to increase as the field grows and matures over time.

Some are especially optimistic, such as Dorinda Floyd from the Department of Revenue, who believes recreational pot will eventually surpass medical sales, The Denver Post reports.

In Arizona, medical marijuana is just getting settled in the market as Proposition 203, The Arizona Medical Marijuana Act, was passed by voters in 2010.

Medical marijuana sales in Arizona are expected to have a significant place in the state’s economy as dispensaries continue to receive licenses and open.

A total of approximately 126 dispensaries are anticipated to exist in the state since 2012, give or take a few depending on the number of traditional pharmacies existing in Arizona at any given time.

For reference, one dispensary may open in accordance with every 10 pharmacies in the state the Arizona Department of Health Services explains explains.

A study published by Arizona State University Professor Timothy Hogan predicts that dispensaries will support 1,500 full-time jobs and pay out $74 million a year in wages in 2016.

After including additional businesses and spending as a result of direct wages, those numbers increase to 6,500 jobs for Arizona workers, $315 million in income payments and $990 million in overall economic activity, the Phoenix Business Journal reports.

All eyes are on Colorado this year as it is the first state in the country to legalize recreational marijuana and the first location in the world to regulate weed from growth to sales.

In November 2012, 55 percent of Colorado citizens voted in favor of legalizing recreational marijuana, and on January 1, 2014, pot retail outlets opened their doors to thousands of Colorado natives and state visitors who lined up to be among the first to legally buy marijuana.

Other states are sure to follow. Washington also voted in favor of legalized recreational weed in 2012, but will wait to open retail stores until later this year.

The Details

Although it is now legal, regulatory marijuana laws do exist.

Those interested in buying marijuana must be at least 21 years old and may only purchase up to an ounce if they are from in state and a quarter ounce if they hail from out of state. Growing marijuana at home is legal as well, allowing no more than 6 plants per household that must be in a secure and locked area.

No public smoking is allowed due to Colorado’s Clean Indoor Air Act which prohibits smoking indoors, even in dispensaries, and will keep marijuana use out of public areas. Recreational marijuana use is legal only on private property with the permission of the property’s owner.

Similar to alcohol laws, driving under the influence of marijuana is illegal when more than 5 nanograms of THC, the drug’s active component, are present in the blood. THC levels are shown to wear off after three hours after use, but the effects of marijuana vary individually and should be used with caution, especially when both alcohol and marijuana are involved, according to the National Organization for the Reform of Marijuana Laws and CNN.

Underage marijuana use and possession is illegal in Denver and is punishable with fines and other consequences, but not jail time.

On a federal level, marijuana remains illegal, but instead of challenging Colorado state law, federal officials will, “focus on serious trafficking and keeping the drug away from children,” CNN said.

Why Legalize Marijuana

Recreational marijuana use will bring in millions of dollars in tax revenue to states that legalize retail pot, the New York Times said.

Retail marijuana in Colorado will have the usual state sales tax of 2.9% plus a 25-percent state tax, making it one of the most highly taxed consumer products in the state, resulting in an additional $67 million a year with $27.5 million of that amount designated to the construction of schools, CNN said.

This will be new revenue for Colorado. Medical marijuana has been around as early as Nov. 2000 when Amendment 20 effectively legalized limited amounts of medical marijuana for patients and primary caregivers, but medical marijuana patients are not charged with extra taxes.

Although both retail and medicinal marijuana establishments are legal in Colorado, the two entities remain separate with different laws and regulations. For example, a personal license and physician recommendation are required for medical marijuana patients.

Community Perspectives

The state Marijuana Enforcement Division mailed out 136 recreational marijuana licenses in December to shops in Denver, and at least 37 of those were able to get past the lengthy legal process to open on Jan. 1, according to the Denver Post and the Gazette.

Most locations were sold out within the first several hours of opening, and despite initial concern, the Denver Post reported police and government officials said crowds were very calm and unproblematic.

Jan. 1 was an exciting day for many. Iraq war veteran Sean Azzariti had campaigned for marijuana legalization and was the first to legally buy recreational pot.

Michael Eymer is benefiting from “cannabis capitalism” with his pot tours that take paying customers to dispensaries, shops and restaurants around Colorado for the full recreational weed experience, CBS said.

Other Colorado communities, however, are not as thrilled.

The cities of Colorado Springs and Greeley are exercising their power to prohibit marijuana commerce, and have chosen not to welcome retail weed to their communities.