Oops! Turns out "legalize it and tax it" doesn't work quite so well after all

[Adam]

Not As Many People Buying Recreational Pot As Predicted

DENVER, Colo. (CBS4) – Sales tax revenue on recreational marijuana in Colorado is down compared to early projections.

Total tax revenue on recreational pot is 13 percent below state estimates which means Colorado is bringing in nearly a half a million dollars less.

“We’re not seeing number of individuals using recreational marijuana that everybody originally thought we would. So because of that it’s very difficult to budget as to how do we spend dollars we don’t know whether we will or won’t,” said State Rep. Geri Gerou.

Not only are sales lower than projected but so are the number of business approved to sell it.

The state expected to approve 110 businesses in the first month but only 59 were approved as of Feb. 1.

“They missed the mark and so the volatility, the unpredictability of this revenue stream is one of the reasons why I think it’s the prudent and responsible policy for us to spend these moneys in rears looking at last year’s actual collection,” said Sen. Pat Steadman.

Meaning that they won’t spend money they don’t have yet except this year.

Guess what? People aren't actually giving up their pot dealers like all the proponents said.

[Novaheart]

Guess what? People aren't actually giving up their pot dealers like all the proponents said.

Perhaps there just aren't as many potheads as they thought.

[Frostbit]

Guess what? People aren't actually giving up their pot dealers like all the proponents said.

With all due respect the article does not make that assumption. I could just as easily say, "See legalizing it didn't turn Colorado into reefer madness" with a zillion people turning to pot and ruining their lives.

Adam, did Colorado make more on taxes from pot this year as compared to last year? Of course they did.

No brainer!! Legalize it. I'll be voting yes in November for Alaska to follow suit. Our oil production is in decline and we grow some of the best pot in the world. Lots of tourists would buy and light up so at least we will get something out of the Pilgrims.

[Gingersnap]

Guess why? The prices for legal weed are way in excess of medical weed or street weed thanks to the taxes they tacked on the back end.

We were talking about this at work today.

Weed was supposed to be taxed like alcohol but that hasn't really happened. Every municipality can tack on their own taxes. It's like if a bottle Scotch had $2.00 for Federal and State taxes but Anywhere, Colorado could also tack on another $5.00 bucks for whatever. Now your low rent Scotch goes from $14.99 a bottle to $20.00 but Bob is still selling Scotch out of his garage for $8.99.

Who are you going to buy from?

The fault here in the implementation. We all said years ago that it had to be like alcohol to be competitive and shut down the illegal producers.

So, what's the issue? Anti-weed people are outraged that more Colorado citizens aren't buying weed. It's an odd position for them. Pro-weed people are pointing out that taxing the product WAY above street or medical prices isn't exactly helpful.

If everything was actually on the up-and-up, weed would sell more or less around $40 - $50 for an 1/8th. Since weed is no longer low-power, this would satisfy the average recreational user for a week or a month, the average medicinal user for a couple of weeks (usually). Most recreational users aren't daily users so the low end is probably the right end.

Rolling a joint is no longer the only way to use weed and all other ways are way more economical. Vaping, edibles, tinctures, and oils require much less weed for the effect and most people are not looking for the Cheech and Chong effect.

We'll see. Hopefully we can reduce the excise tax shortly.

[Adam]

With all due respect the article does not make that assumption. I could just as easily say, "See legalizing it didn't turn Colorado into reefer madness" with a zillion people turning to pot and ruining their lives.

No, I made that deduction, and I made it a long time before Colorado legalized pot, for exactly the reasons Ginger cited.

Adam, did Colorado make more on taxes from pot this year as compared to last year? Of course they did.

No brainer!! Legalize it. I'll be voting yes in November for Alaska to follow suit. Our oil production is in decline and we grow some of the best pot in the world. Lots of tourists would buy and light up so at least we will get something out of the Pilgrims.

Fine by me. I'm not opposed to states legalizing pot.

Guess why? The prices for legal weed are way in excess of medical weed or street weed thanks to the taxes they tacked on the back end.

We were talking about this at work today.

Weed was supposed to be taxed like alcohol but that hasn't really happened. Every municipality can tack on their own taxes. It's like if a bottle Scotch had $2.00 for Federal and State taxes but Anywhere, Colorado could also tack on another $5.00 bucks for whatever. Now your low rent Scotch goes from $14.99 a bottle to $20.00 but Bob is still selling Scotch out of his garage for $8.99.

Who are you going to buy from?

The fault here in the implementation. We all said years ago that it had to be like alcohol to be competitive and shut down the illegal producers.

So, what's the issue? Anti-weed people are outraged that more Colorado citizens aren't buying weed. It's an odd position for them. Pro-weed people are pointing out that taxing the product WAY above street or medical prices isn't exactly helpful.

If everything was actually on the up-and-up, weed would sell more or less around $40 - $50 for an 1/8th. Since weed is no longer low-power, this would satisfy the average recreational user for a week or a month, the average medicinal user for a couple of weeks (usually). Most recreational users aren't daily users so the low end is probably the right end.

Rolling a joint is no longer the only way to use weed and all other ways are way more economical. Vaping, edibles, tinctures, and oils require much less weed for the effect and most people are not looking for the Cheech and Chong effect.

We'll see. Hopefully we can reduce the excise tax shortly.

I certainly am not "outraged." I'm just vindicated. I've said for ages (and so has Gramps, at the very least) that the pipe dream (no pun intended) of the coffers swelling and drug crime disappearing was simply not going to come to fruition. The claim all along has been that virtually no one would bother going to the dealer on the street for pot when they can just pick it up at the 7-11 down on the corner. I've said for a very long time that this simply isn't true, and now we know it isn't true.

[Gingersnap]

I certainly am not "outraged." I'm just vindicated. I've said for ages (and so has Gramps, at the very least) that the pipe dream (no pun intended) of the coffers swelling and drug crime disappearing was simply not going to come to fruition. The claim all along has been that virtually no one would bother going to the dealer on the street for pot when they can just pick it up at the 7-11 down on the corner. I've said for a very long time that this simply isn't true, and now we know it isn't true.

Nope, we don't. You can't buy weed at 7/11, the corner store, Sam's Club, Whole Foods, or Safeway. You can't buy at a price that is equivalent to the production + normal tax that is true of liquor in this state.

We are at a stage similar to the years shortly after Prohibition where many, many local authorities "allowed" liquor but only under bizarre regulations and tax structures. Of course, moonshining and black market liquor sales happened - how could they not? But 15 years later, that was not the case in a lot of places. Those that still held to dry laws and State liquor control saw their potential tax gains drain off to out of state or out of county concerns.

It's early days yet.

[Novaheart]

Nope, we don't. You can't buy weed at 7/11, the corner store, Sam's Club, Whole Foods, or Safeway. You can't buy at a price that is equivalent to the production + normal tax that is true of liquor in this state.

We are at a stage similar to the years shortly after Prohibition where many, many local authorities "allowed" liquor but only under bizarre regulations and tax structures. Of course, moonshining and black market liquor sales happened - how could they not? But 15 years later, that was not the case in a lot of places. Those that still held to dry laws and State liquor control saw their potential tax gains drain off to out of state or out of county concerns.

It's early days yet.

You can't grow liquor in a window box.

[Frostbit]

Nope, we don't. You can't buy weed at 7/11, the corner store, Sam's Club, Whole Foods, or Safeway. You can't buy at a price that is equivalent to the production + normal tax that is true of liquor in this state.

We are at a stage similar to the years shortly after Prohibition where many, many local authorities "allowed" liquor but only under bizarre regulations and tax structures. Of course, moonshining and black market liquor sales happened - how could they not? But 15 years later, that was not the case in a lot of places. Those that still held to dry laws and State liquor control saw their potential tax gains drain off to out of state or out of county concerns.

It's early days yet.

Bingo!! Give that woman a cigar.

I worked for the PLBC in the early 80's. That's the Pennsylvania Liquor Control Board. Key word Control. The State kept control of sales with odd hours, minimal stores in bad locations but still made megabucks.

Eventually it will all settle out with pot as well.

[Celeste Chalfonte]

Guess what? People aren't actually giving up their pot dealers like all the proponents said.

Duh. I know a lot of professionals who smoke socially, occasionally. They're not going to risk their licenses to practice their profession by become open marijuana users as long as the Feds can still lock you up for it. It's not really legal until the DEA is told to lay the fuck off, officially, by law. Step up, Congress, and then we'll talk.

[Celeste Chalfonte]

No, I made that deduction, and I made it a long time before Colorado legalized pot, for exactly the reasons Ginger cited.

Fine by me. I'm not opposed to states legalizing pot.

I certainly am not "outraged." I'm just vindicated. I've said for ages (and so has Gramps, at the very least) that the pipe dream (no pun intended) of the coffers swelling and drug crime disappearing was simply not going to come to fruition. The claim all along has been that virtually no one would bother going to the dealer on the street for pot when they can just pick it up at the 7-11 down on the corner. I've said for a very long time that this simply isn't true, and now we know it isn't true.

No we don't.

[Gingersnap]

We don't know jack and we won't for maybe 5 - 7 years. It takes time for municipalities to get their act together. It takes time for the excise tax issue to get sorted out and normalized. It takes time for both the fear-mongering and the Alleluia Chorus to flatten out.

We'll see down the line. Everybody, pro and con, needs to settle down for a while.

[Norm dePlume]

Just to put this into perspective:

The state of Colorado, through collection of excise taxes and license fees (both state and local) on alcohol, raised $3.3 M in January (up about 3% over January, 2013) and $3.5 M in February (up 4% over February, 2013).

The disappointing revenues from marijuana were $3.5 M in January and $4 M in February.

[Adam]

Oh dear.

When Colorado voters approved special taxes on recreational marijuana last November, the official fiscal analysis estimated the taxes would bring in a combined $33.5 million through that fiscal year, which ended earlier this summer. Budgeters for Gov. John Hickenlooper had similarly optimistic projections.

But the actual number came in at just over $12 million.

A market study for the Colorado Department of Revenue says the lower-taxed medical-marijuana market, which continues to outpace the recreational market in sales, is to blame. Rather than pulling consumers out of the medical-marijuana market, the recreational market has largely feasted on tourists and people who previously bought pot on the black market.

"I think our original assumption about the cannibalization was wrong," Colorado Legislative Council economist Larson Silbaugh said at Tuesday's committee meeting.

Well, DUH! Any idiot could have told them that. Potheads might find a way to skirt the taxes? Whodathunkit?!

None of these people have ever actually run a business, have they?



Well, this ought to be fun. Now they can try to tax people's medicine and see how that goes over, or else admit that they're not going to get the swell of revenue that they claimed they were going to.

Good luck with that!

[Celeste Chalfonte]

Oh dear.



Well, DUH! Any idiot could have told them that. Potheads might find a way to skirt the taxes? Whodathunkit?!

None of these people have ever actually run a business, have they?



Well, this ought to be fun. Now they can try to tax people's medicine and see how that goes over, or else admit that they're not going to get the swell of revenue that they claimed they were going to.

Good luck with that!

So? It might not be what they hoped, but it's still $12 million in tax revenue that they didn't have before. Besides, taking from the black market is a worthwhile goal in and of itself.

[Gingersnap]

Oh dear.



Well, DUH! Any idiot could have told them that. Potheads might find a way to skirt the taxes? Whodathunkit?!

None of these people have ever actually run a business, have they?



Well, this ought to be fun. Now they can try to tax people's medicine and see how that goes over, or else admit that they're not going to get the swell of revenue that they claimed they were going to.

Good luck with that!

This really is a case where "they haven't tried it yet for real". The original idea (and the one okay'd by the voters) was that weed would be treated like beer or wine. It would be taxed like beer or wine.

By the time the bureaucrats were done, the taxes on weed were astronomical. You'd have to be a financial idiot to pay rec weed taxes when you could get a red card and pay much less or just use the black market and pay none.

If taxes were in line with alcohol, people would pay more than black market prices for better, known weed strains. That's why people get red cards. Not because it's magically more legal but because it's legal AND you get a much better product with known growing/processing conditions than street weed.

Amusingly, the law allows for 6 home grown plants (3 budding plants) at a time. With the better, more productive strains available today many casual users are just growing their own and cutting the government parasites off entirely.