Thursday, September 4, 2014
Colorado is one of the first states to legalize marijuana for recreational use. Not only has Colorado propelled legalized marijuana into the mainstream, but it is also trumpeting revenue from the 27.9% in taxes. However, the $33.5 million Colorado projected to collect in the first six months of 2014 was too enthusiastic. “It’s now the next morning, so to speak, and Colorado is missing $21.5M in pot taxes!”
One explanation is that with such high taxes, many smokers are still buying on the black market. In fact, only about 60% of purchases in Colorado will be through legal channels due to prices.
Despite its opponents, the Colorado tax on marijuana has been upheld notwithstanding claims that paying it amounts to self-incrimination violating the Fifth Amendment. Plaintiffs want the taxes on recreational pot outlawed, reasoning that they require businesses and consumers to implicate themselves in federal crimes. Although the plaintiffs have failed to get an injunction, the lawsuit challenging taxes will continue as the stakes are high.
See Robert W. Wood, $21.5 Million In Marijuana Taxes Just Went Up in Smoke, Forbes, Sept. 2, 2014.