Task Force Endorses High Taxes for Marijuana

March 1, 2013

TOO HIGH? Some are concerned that a high tax on marijuana could push buyers back into the black market

DENVER–Marijuana could become a lucrative cash crop for Colorado under a taxation system discussed Thursday at the final meeting of the state’s Amendment 64 Implementation Task Force.

The group agreed to recommend a 15 percent excise tax as well as a special sales tax on retails sales of recreational marijuana. No specific tax rate was agreed upon, but one figure under discussion was 25 percent, in addition to applicable county sales taxes.

Those taxes could potentially result in tens of millions of dollars for state and county governments. Amendment 64, which was approved by voters in November, requires that the first $40 million raised annually go toward a school construction fund.

Pro-pot activists raised concerns that the tax burden on marijuana sales could become so high that it would push buyers back into the black market. Ultimately, however, the task force agreed to leave that issue to the state legislature.

The task force is now expected to prepare its recommendations and then present them to the state legislature within the next week or so. The committee has been working for two months to create a proposed regulatory framework for marijuana, the first of its kind in the nation.

“Today marks the end of a truly historic process,” said Christian Sederberg, a task-force member representing the Committee to Regulate Marijuana Like Alcohol, in a statement.

“I am confident that Colorado is on the right track to swiftly implement a comprehensive regulatory environment that will allow for the safe commercial cultivation and retail sale of marijuana to adults,” he said.

The legislature is charged with giving final approval to a regulatory system modeled on that used for liquor sales. Any marijuana taxes recommended by the legislature would go before the voters for final approval in November.

Gov. John Hickenlooper popped by the meeting to thank task-force members for their hard work. He also expressed concern about marijuana sales resulting in more homeless teenagers.

“I’m not saying the sky is falling and we’re going to have thousands of homeless teenagers we didn’t have before, but we will have more,” said Hickenlooper, according to 7News.

Attorney General Eric Holder said Tuesday that the Justice Department plans to issue within the next few weeks an opinion on states whose voters have approved recreational marijuana use. In November, Colorado and Washington became the first states to sanction non-medical marijuana for adults 21 and over, despite a federal ban on marijuana.

Hickenlooper said he spoke with the attorney general at the presidential inauguration in January, and that Holder assured him that “all hands are on deck” on coming up with a resolution.

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