Wednesday, March 04, 2015

Reefer madness paranoia costing greedy Harper government billions annually - money it could use to buy your votes!

"They say crime pays? Not exactly legalize a former crime and tax it and it really pays."

Good Day Readers:

After one year "the Colorado experiment" is producing some very interesting numbers. In its first year of operation the state is expected to earn over $40 million it tax revenues from all sources related to the production and distribution of marijuana. Canada has a population of about 35 million versus Colorado's 5.36 million or approximately 6.53 times. Ballparking the numbers that's about $261.2 million in additional revenues the Harper government would have had today to buy your votes in time for the upcoming election had it implemented the Colorado model last year. Stupidos!

Most politicians are hypocrites and Colorado is no exception Its governor railed against legalization as did a mayor of a significant sized city but when the windfall was being divvied up they were the first in line with hands outstretched.

According to England's MailOnline newspaper last year 74 tons of marijuana flowers were sold in Colorado which is equivalent to 12 African elephants or 148 adult male polar bears. Again, applying the 6.53 conversion factor that's 483.2 tons, 78.4 high elephants and 966.4 stoned polar bears - Jezus that's probably the entire Canadian population! Now picture them all being housed at 24 Sussex Drive. For a change that would give Laureen Harper something meaningful to do during the election campaign!
Has poppa bear already been toking?

While it will be the economy, stupid, marijuana could be the elephants and polar bears in the room.

Read on.

Clare L. Pieuk
It's no toke: Colorado pulls in millions in marijuana

Wednesday, March 4, 2015
Kelly Phillips Erb/Contributor

They say crime pays? Not exactly. Legalize a former crime and tax it and it really pays.

Just ask Colorado. Perhaps not so awkwardly labeled the “Highest State,” Colorado pulled in $2 million in taxes related to the sale of recreational marijuana…in January 2014 alone. Combined with taxes on sales from medicinal marijuana, the state pulled in nearly $3.5 million in pot-related tax revenue. If that trend continues, the state will see more than $40 million in additional tax dollars in 2014. To put that in perspective, that’s approximately 1% of the total annual budgets for Delaware, South Dakota, Montana or West Virginia.

There are a couple of layers of tax in place on the sale of marijuana. To begin with, there’s a 10% state sales tax imposed on retail marijuana and marijuana products on top of 2.9% in existing state sales tax (this is in addition to any local sales tax). As with other taxable products in Colorado, the tax is on the final consumer and cannot be included in the advertised price. Together with local sales taxes and special taxes, the tax imposed on consumers in Denver on the purchase of marijuana can reach as high as 21.12% (downloads as a pdf). Denver County accounted for more than half of all medicinal and recreational marijuana related sales tax revenue, while outside of the capital, taxes can be closer to 13%. No matter the level of tax, sales were pretty healthy statewide, with $14.02 million worth of recreational pot sold.

In addition to sales taxes, Colorado also imposes a “retail marijuana excise tax” of 15%. That tax is assessed on the first sale or transfer of marijuana from a retail marijuana cultivation facility and is calculated by taking the average market rate per pound and multiplying it by the weight of the flower times the tax rate. That means it’s not directly charged to the consumer. The state is serious about that last piece: while the tax can certainly be rolled into the overall price as the cost of doing business, it may not be separately stated on a receipt to give the appearance that it’s a consumer tax.

Medical marijauna Acapulco gold. (PhotoCredit: Wikipedia)

Additional licenses and fees are also imposed with those for medical marijuana outpacing those for retail marijuana by a factor of about five to one. The sale of medical marijuana has been legal and regulated in the state since 2000. The sale of recreational marijuana was made legal this year so these numbers for taxes, licenses and fees, are the first look at how those sales are directly impacting the economy.

The result? Despite taxes, no one is complaining – especially not the Department of Revenue. Even at relatively high rates, consumers are still buying and state officials have indicated that those numbers are on target.

The biggest problem is actually how to spend the money: it’s not exactly a terrible problem to have. Voters approved a law last year that requires the first $40 million collected from the special excise taxes to be directed towards school construction. But after that? The state hasn’t yet decided to do with the money. Gov. John Hickenlooper (D) has proposed using a significant chunk of the revenue on programs related to marijuana legalization including those to keep youths away from drugs, substance abuse treatment, and my favorite, the “anti-stoned-driving campaign.” Here’s my guess about the programming: it won’t be particularly popular, at least not for long, and it won’t be inked as such in the final bill.

Here’s the reality: forget marijuana, it’s the tax dollars that are addictive. The more lawmakers have, the more that they spend. And then they want even more. I can’t imagine a scenario in which lawmakers would agree to simply direct millions and millions of tax dollars into more programming, well-intentioned or not. Expect a battle in Colorado over exactly how to spend that money.

As for the rest of the nation? They’ve got their perhaps slightly bloodshot – and envious – eyes on Colorado. For years, the sale of marijuana has been illegal – and taxing it wasn’t even seriously considered for fear that it might somehow legitimize the use. Now, twenty states plus the District of Columbia allow people to use medical marijuana and two states (Colorado and Washington) allow sales for recreational use. Nationwide, it appears that public opinion is changing: a current petition to make marijuana legal has garnered nearly 100,000 signatures. Legalizing it would mean significant changes in the way we view crimes and the use of drugs across the country: taxing it would merely sweeten the pot.

For more on this issue, see:

Stirring the pot: Could Legalizing Marijuana Save the economy?

As Many Celebrate 4/20, Feds Still Won’t Budge On Regulation and Taxation of Marijuana

IRS Just Says No To Medical Marijuana Deductions

Want more taxgirl goodness? Pick your poison: receive posts by email, follow me on twitter (@taxgirl), hang out with me on Facebook or check out my YouTube channel. If you want to keep an eye on documents I’ve posted, check out my profile on Scribd. And finally, you can subscribe to my podcast on the site or via iTunes (it’s free).
Colorado's marijuana sales hit $700 million in first legal year with 17 tons sold
  • Medical marijuana accounted for $386 million of sales and recreational pot brought in $313 million in 2014, according to annual report
  • 49.7 tons of medical marijuana flowers, while 4.81 million units of edible marijuana were purchased last year
  • Voters in Colorado and Washington opted to legalize recreational marijuana use by adults in landmark twin ballots in 2012
  • First retail stores opened in Colorado on January 1, 2014
By Myriah Towner
Monday, March 2, 2015

A year after retail marijuana stores opened in Colorado, sales hit nearly $700million as 17 tons of the recreational buds were bought by consumers in the state's first year of full legalization.

However sales for medicinal pot still outstripped the recreational sales by almost 50 tons, according to officials.

In its first annual report, it was revealed that 49.7 tons (109,578 pounds) of medical marijuana flowers were sold in 2014, while 17.5 tons (38,660 pounds) were sold in the retail market, said the Colorado Department of Revenue's Marijuana Enforcement Division.

A year after retail marijuana opened in Colorado 17 tons of the recreational buds were bought by consumers (above Tyler Williams of Blanchester, Ohio selects marijuana strains from the 3-D Denver Discrete Dispensary in December 2014) Photo: Getty Images

In its first annual report, it was revealed that 109,576 pounds (49.7 tons) of medical marijuana flowers were were sold in 2014, while 38, 660 pounds (17.5 tons) were sold on the retail market, said the Colorado Department of Revenue's Marijuana Enforcement Division.

Sales hit nearly $700 million last year, with medical marijuana accounting for $386million and recreational pot bringing in $313million.

But recreational sales of pot-infused edible products, such as candies and cookies, outstripped medical sales by about 2.85million units to 1.96million, according to the report.

In total, 4.81million units of edible marijuana were sold - which would equal giving one edible to almost every resident in Colorado, according to 9News.

In a national first, voters in Colorado and Washington state opted to legalize recreational marijuana use by adults in landmark twin ballots in 2012, and the first retail stores opened in Colorado on January 1, 2014.

States such as Oregon and Alaska, which have now also voted to legalize recreational pot as well as others where lawmakers face proposals to do so, are watching the Colorado results closely.

Recreational sales of pot infused edible products, such as candies and cookies outstripped medical sales by about 2.85 million units to 1.96 million, according to the report (above an infographic created illustrating the findings from the report.
Findings also showed that 322 retail stores were licensed at the end of the year, up from about 200 six months earlier, while 833 licenses were issued to retail businesses in general, and 1,416 medical marijuana businesses were approved by the state.

It said medical businesses were cultivating around 300,000 marijuana plants on average each month during 2014, while the number of retail plants rose steadily from fewer than 25,000 in January to nearly 217,000 during December.

The report noted that more than twice as many Colorado jurisdictions had 'completely opted out' of allowing either retail or medicinal pot businesses to operate than had permitted them.

The state's marijuana laws have been changed in federal court by neighbouring Nebraska and Oklahoma, which argue weed is smuggled across their borders. Some Colorado residents said the pot industry has hurt their families, businesses or property values.

Sixty-seven jurisdictions allow medical and retail licensees, 21 permit only medical, and five only retail, while 228 jurisdictions prohibit them both.

The state's marijuana laws have been challenged in federal court by neighboring Nebraska and Oklahoma, which argue weed is smuggled across their borders.

Some Colorado residents said the pot industry has hurt their families, businesses or property values.

Supporters said voters have chosen to take the trade out of the hands of criminals, and a Quinnipiac University Poll this week showed that 58 percent of Colorado residents support marijuana legalization, versus 38 percent against it.
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