Two years after Colorado began its first retail sales of cannabis, towns and cities across the state are enjoying the benefits in a number of ways. With sales this year expected to reach $1 billion, local governments are seeing windfalls of tax revenue, which is funding education, recreation, infrastructure improvements, and even aid to the homeless.
The small town of Mountain View may be able to dispel its reputation for collecting revenue through speeding tickets, now that two pot shops reside there.
“We have such a small tax base,” said Mayor Jeff Kiddie, who opposed pot stores. “Medical and retail marijuana have definitely helped the town’s bottom line. I’d be lying if I said it didn’t.”
Similar stories abound in the 22 counties and 62 cities that allow retail cannabis sales.
In Aurora, which has collected millions in sales taxes and fees since October 2014, the City Council keeps the money in a separate fund so it can show the public exactly where cannabis revenue is spent. $1.5 million will be used to address the homeless issue, $2.8 million will go toward a recreation center, and $3.8 million will fund an Interstate 225 crossing.
Northglenn uses the money for capital projects and to purchase water rights. Adams County will spend $500,000 on scholarships for low-income students. Filling potholes and fixing roads is a common theme in other towns.
“There’s a lot of money left over to address safety issues that come up or really take on projects that these local communities do not necessarily have the funds to deal with,” said Mike Elliott, executive director of the Marijuana Industry Group. “For some communities, this tax revenue has made a huge difference.”
Denver collected $29 million last year through taxes and licensing fees; the capitol city prefers to spend this revenue on “ramped-up regulation, enforcement, public health and education efforts.”
While bureaucrats both honest and crooked are reveling in the flush of cash, more importantly, Colorado citizens are reveling in their newfound freedom. Judging by the immense market impact of retail sales, cannabis is a popular product.
Perhaps people are finding it a better and safer alternative than alcohol. There is evidence that people are giving up prescription painkillers in favor of medical cannabis.
A fifth major benefit of legal cannabis sales is the dwindling black market. The federal government’s own statistics show that since 2012, when Washington and Colorado voted to legalize cannabis, trafficking offenses have fallen sharply.
Violence is less of a concern in cannabis trafficking than the issue of unknown origin and handling. With legalization, consumers know exactly where their product comes from and what is in it, including the THC content.
Competition that can operate in the open, instead of having to hide from a senseless drug war, is able to produce the highest quality product using responsible environmental practices.
The temptation of tax revenue is certainly one reason why lawmakers in Colorado and other states have endorsed recreational cannabis sales. But taxation should not be the guiding force for legalization.
Oregon is proving this point. Authorities in the Beaver State have enacted a 25 percent sales tax on recreational cannabis, which is causing some people to consider going back to the black market. This eagerness to collect as much revenue as possible is a symptom of burgeoning government and threatens to drive people away from the legal market.
On the good side, Oregon does not tax medical cannabis at all, perhaps because their medical laws have been in existence since 1998 and sudden taxation would meet with fierce resistance. It is important that other states, as they legalize medical use and sales, follow this example of no taxation.
Colorado continues to provide an interesting experiment in the legalization of a plant that has been demonized by government for decades. While taxation of recreational use is allowing cities to provide community benefits, let’s remember that freedom is the number one reason why legalization must happen everywhere.