Colorado pot taxes have a mild first month… but don’t count them out yet


An employee of Good Meds medical cannabis center in Lakewood, Colo., handles a jar of pot. (Credit: Matthew Staver/The Washington Post.)

It’s just one month into a brave new world of legal recreational marijuana in Colorado and sales are… well… just OK. But don’t count the new industry out yet.

Supply was short, licenses were spare and what will no doubt become an increasingly professional sector was just warming up. So there’s no way of knowing yet whether the January state haul of $2.1 million in taxes and fees is an early indicator of what will be a weaker-than-expected market or whether it represents a slow start to a business that claims sales north of a billion dollars. 

When compared to expectations for the first six months of the year, January sales appear discouraging. If they hold for the remainder of the fiscal year, the state will see about $21 million in revenue. A mid-2013 fiscal analysis of the proposal that became the law, however, foresaw an additional $33.5 million in revenue generated in the first six months of the year. An estimate last month from Gov. John Hickenlooper’s (D) budget office predicted revenues of about $35.2 million.

But don’t count those estimates out yet. Many have always expected a slow start and supply was short while licenses were spare when legal sales started. Just 24 businesses were licensed for sales on Jan. 1. By month’s end, 59 businesses had filed returns, according to the Denver Post. By the end of February, approval had been given to 167 stores, the paper reported. The industry is just getting started.

More than 60 percent of sales occurred in Denver County. Summit County saw the second-highest level of sales at just under 9 percent. The rest was spread throughout the state.

In his plan last month, the governor requested that almost all marijuana revenue be split up among a variety of programs. The two that would receive by far the largest chunk of the revenues were a prevention campaign for children and substance abuse treatment aid. The rest would be split among public health spending, regulatory oversight and law enforcement.

The state also launched a public service campaign on Monday to discourage stoned driving. The three ads are below.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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