Friday, May 10, 2013

Did Colorado Free Marijuana Or Just Make It Easier to Tax?

It probably wasn't difficult to buy a joint before it was "made legal," but the government is sure taking its piece of the action now.

Colorado is set to become the first U.S. state to regulate and tax sales of recreational marijuana, after lawmakers approved several bills that set business standards and rules, reports NPR. There's going to be  a 15 percent excise tax, and a 10 percent sales tax.


  1. More incentive for underground production and importation.

  2. I'm not aware of whether drug stores can sell marijuana as they would tobacco products (I doubt they would at this stage), but I can't imagine Colorado would make that much revenue from taxing marijuana. People will continue to buy drugs from friends and acquaintances not so much in a store. I'm not sure a lot of companies will jump on board and start selling marijuana, but it would be a lot of cheaper just to sell it as they did when it was illegal. Compare the 25% tax on marijuana in Colorado to $0.84 per pack of cigarettes in Colorado (which is ~15% if a pack costs $5.19). I think the tax on marijuana is too steep for Colorado to make any revenue. However, Colorado will most likely spend less money on regulating marijuana use.

  3. 10% tax is so much worse than jail time

  4. The govt is going to have a hard time enforcing compliance from home growers. Sure, they'll collect from the storefronts and the growers that supply them, but I predict that plenty of marijuana will continue to be sold from the home (person to person) until economies of scale can develop. This won't happen until weed is legal at the Federal level.

    Marijuana growers are suspicious of the government and will most likely remain so in the near future.