As states like Colorado, which has been a role model for other states legalizing cannabis, continue to prosper it is apparent that the cannabis business can count on one constant in this new industry, taxes. In the State of Colorado the tax rate for retail cannabis sales increased from 10% to 15% as of July this year, with the tax for cultivators also increasing to 15% of their sales.
Since February 2014 through September 2017, the State of Colorado has collected $573,591,933 in marijuana taxes, license and fee revenue! That’s better than the State Lottery. This doesn’t include the city and county cannabis taxes and fees that will add to the cost of being in the cannabis business.
The State of California, which is expected to be the largest supplier of weed in the world, is set to implement the state licensing starting January 1, 2018, after the passage of Prop 64 that was passed by 56% of CA voters. With this state license comes the “track and trace” software that will require the growers of cannabis to report their grow production. And, report it to the State to pay their share of taxes.
The bottom-line is cities that have already seen the demand for growing sites and the potential windfall from collection of cannabis related taxes are changing their stance on allowing cannabis operations in their towns. They don’t want to miss out on the money that can be used to pay for their pensions and schools.
Cannabis taxes and fees are the new way to fill the gap in city budgets that are struggling to pay inflated pensions and underfinanced schools. Rather than deal with the pain of reducing pensions and limiting school budgets, they are allowing cannabis to be part of their community. Politicians have found a way to keep their union employees happy and pay for services.
Cannabis is joining cigarettes and alcohol as the next “sin tax” and money will flow in to the States and cities that have approved cannabis businesses. It won’t be long before the states that have not approved cannabis will do so when they see that their issues with their own pensions and schools can be resolved with cannabis tax money.
It’s a new era for taxation and cannabis appears to be the answer.