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The Billion-Dollar Tax Bonanza From Colorado's Cannabis Shops

The General

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Cannabis is likely to become an annual billion-dollar industry in Colorado by next year after officials suggested that greater volumes of the drug are being sold than anticipated. Colorado was the first U.S. state to licence and tax sales of the drug for recreational use. Dozens of shops opened for business on Jan 1. In the lead-up to legalization, it was estimated that sales would reach $395 million in the 2014-15 financial year.

But in its first assessment since the New Year, the budget office of Governor John Hickenlooper has increased that to $612 million. When the $345 million in estimated sales of the drug to people with medical conditions is added, the total adds up to almost $1 billion. Colorado will collect $117.8 million in taxes from the recreational sales, with a further $15.8 million from medical sales. There are now 163 cannabis shops in the state. It is said to be selling for more than the $202 an ounce predicted.

Hickenlooper, a Democrat, had opposed legalization but the measure was passed by 65 per cent of Colorado voters. In a letter to local politicians this week, he said he was "pleased" with the extra revenue. The governor said the latest estimates were based on "a number of assumptions of the new industry" and included "variables", likely to include the number of tourists visiting to buy the drug. Colorado's experiment is being closely watched by other U.S. states as opinion polls in some areas show a swing in favour of legalization.

The state is using the first $40 million it collects in taxes each year to build schools. Outlining how the newly estimated extra windfall would be spent, Hickenlooper said it would include efforts to prevent cannabis use by teenagers, campaigns against driving under the influence of the drug and public health projects. Mike Elliott, the executive director of the Marijuana Industry Group, told the Denver Post the "idea of this being a billion dollar industry seems reasonable". Mason Tvert, who ran the legalization campaign, said politicians "around the country are watching how this system unfolds in Colorado, and the prospect of generating significant revenue while eliminating the underground marijuana market is increasingly appealing". The Pacific coast state of Washington, where recreational cannabis shops will open in a few months, predicted this week that selling the drug will bring it $190? million in tax revenue over the next four years.


News Moderator - The General @ 420 MAGAZINE ®
Source: Theprovince.com
Author: Nick Allen
Contact: Contact Us - The Province
Website: The billion-dollar tax bonanza from Colorado?s cannabis shops
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