Colorado Surpasses $1 Billion in Marijuana Tax Revenue
After posting its highest-grossing monthly sales ever in April and May this year, Colorado’s legal cannabis industry has generated more than $1 billion in taxes and fees.
Marijuana has made Colorado more than a billion bucks since legal sales began in 2014. Taxes and fees have pumped exactly $1,017,120,136 into Colorado education and health care programs, mental health services and youth drug-prevention programs. It’s exactly what legalization advocates and policymakers had hoped for, and there are no signs of sales slowing down. In fact, Colorado marijuana sales are accelerating, and that means state revenue is too. It took Colorado more than three years of retail cannabis sales to generate $500 million in state revenue. But it took less than two years to break the $1 billion milestone.
Record-Breaking Marijuana Sales Generating Massive Revenue for Colorado
They say April is the cruelest month. But not for Colorado’s cannabis retailers, who posted their highest-grossing month ever in April this year. Then, they did it again, in May, posting the second-highest sales numbers Colorado has ever seen. In those two months alone, record-breaking marijuana sales generated more than $48 million dollars for state coffers. And it was that $48 million that brought Colorado over the $1 billion mark in state revenue.
According to marijuana sales data, Colorado’s monthly haul of taxes and fees hasn’t dropped below $20 million since July 2017. Compare that to the first month of recreational sales, February 2014, which earned Colorado just $3.5 million in tax and fee revenue.
Since those early days, Colorado’s cannabis industry has grown to encompass nearly 3,000 licensed businesses and over 41,000 licensed employees. And according to the most recent figures from the Colorado Department of Revenue, that industry has so far generated more than $6.5 billion in sales. “It’s going very well,” said Colorado Gov. Jared Polis back in May. “It’s creating tens of thousands of jobs, tax revenue for the state, filling up buildings for landlords and reducing crime.”
What is Colorado Doing with All that Weed Money?
Colorado’s tax scheme has pretty much set the standard for states that have followed Colorado’s lead legalizing marijuana. The state collects a 15 percent excise tax on retail marijuana, in addition to a 15 percent special sales tax. Medical marijuana is taxed at 2.9 percent at the point of sale. Besides sales and excise taxes, business and individual licensing fees also generate millions of dollars for the state.
That tax revenue goes into the coffers of both state and local governments in Colorado. And it funds everything from youth and public health programs, youth literacy initiatives, anti-bullying programs, mental health and substance abuse programs, and more.
“This industry is helping grow our economy by creating jobs and generative valuable revenue that is going towards preventing youth consumption, protecting public health and safety and investing in public school construction,” said Gov. Polis in a statement.
But with the accelerating rate of marijuana sales, Colorado is generating more state revenue from weed than it thought it would. As a result, some of the marijuana tax and fee revenue didn’t end up where legalization advocates thought it would. And so lawmakers are constantly tweaking the formula that parses out all that cash and distributes it to various state programs.
But from the perspective of Colorado government, it’s a good problem to have. “There is obviously more advantage to us when we are all a little bit more special, and obviously more and more states are moving in this direction,” said Gov. Polis.