Colorado Makes Big Money from Legalized Marijuana – NBC Bay Area

Scott: Pro pot group says Colorado recently made history making more money from recreational marijuana than alcohol. It’s a claim that could help make the case for other States, if it’s true. We take a look in this morning’s Reality Check. It’s a debate blazing across the country as States like California weigh the financial benefits of legalizing recreational marijuana. Colorado is one of the few States that’s already done so and the big bucks are starting to roll in. At least that’s the headline of a new report from the Marijuana Policy Project or MPP, a pro pot group claiming the Centennial State is rewriting history.

Vazquez: It’s collecting taxes. The taxes that it has decided to impose on marijuana is bringing in more money than it is um bringing in from alcohol and that’s just a game changer.

Scott: Before policy makers get drunk on the returns let’s look at them. The report finds a haul of 70 million dollars in the first full year compared to a more pedestrian 42 million for alcohol. We’re talking about real meaningful dollars. We ran those figures by Joseph Henchman at the Tax Foundation, a nonpartisan think tank in DC. For the 1st time in history a state generates more annual tax revenue from marijuana sales than from alcohol sales. Is that actually true?

Henchman: It is true. I don’t know how much it tells you, but Colorado has raised about 70 million dollars over the last year from its marijuana taxes uh and that’s pretty much on projection.

Scott: On projection, but also powered by a dare we say psychedelic tax rate. Check out the breakdown from the Colorado department of revenue. The specialty marijuana sales tax is a whopping 10% which is padded by a 15% excise tax paid by pot producers. So all said and told the total marijuana tax rate in Colorado is almost 30%. Meantime the State’s taxes on alcohol, be it for wine, liquor, or beer range from a few cents to a few dollars.

Henchman: It’s worth noting of course that Colorado has very high taxes on marijuana and very low taxes on alcohol. So it’s not like people aren’t still buying, uh. Alcohol sales are still much more than marijuana sales.

Scott: In fact alcohol sales in Colorado are still much higher than pot. One reason why the MPP says it’s not including general sales taxes in its calculations. Maybe there’s more money being generated for alcohol if you were to include the general sales tax too?

Vazquez: Overall it’s just the specific special taxes levied on marijuana versus alcohol. They are higher for marijuana. We are generating more revenue from marijuana than alcohol.

Scott: Or another way to state the bottom line, Colorado is generating more revenue from marijuana specific taxes than alcohol taxes, but alcohol is still likely bringing the state more money. So the claim is only partly true. And we did ask Mr. Henchman how much money California could make right away from recreational pot. He guessed at least a couple 100 million dollars a year, which sounds like a lot of money until you remember California’s budget is over a 100 billion dollars, Laura.

Laura: Very interesting