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Wednesday, April 16, 2014

Revenue from marijuana legalization up in Colorado

Posted By on Wed, Apr 16, 2014 at 2:09 PM

click to enlarge weed_tot_2.jpg
Some of y'all may have read the Observer's deep investigation into, um, tater tots in Colorado.

A new report from Moody's suggests that the state's experiment with marijuana legalization is likely to keep bringing in big revenues. Danielle Kurtzleben of Vox.com explains (and notes that this is good news for Colorado public school funding): 

Governor John Hickenlooper had initially estimated there would be $70 million in tax revenues during the first full year of legal pot. But in February, he provided a more optimistic outlook, saying total revenues for the first full year would be $98 million, a roughly 40 percent increase. He also said in February that revenues for the first fiscal year, starting in July, would top out $134 million, though he has since dialed down those expectations back, by around $20 million.

That kind of acceleration might sound like some drug-addled math, considering that Colorado had only $7.5 million in revenues during the two months combined. But according to Moody's, the first two months' worth of weed tax hauls "likely significantly understate long-term revenue potential." That's because the state's full pot economy hadn't even yet grown to its full potential. New retailers have continued to open, growing cultivation has boosted supply, and more licenses have been issued, meaning many more opportunities to sell bud.

All of that pot-smoking is great for Colorado's kids, as it turns out. Of the pot revenue spending that is authorized, the lion's share, $40 million, is for public schools. But the additional, unexpected revenues have yet to be allocated. Hickenlooper has proposed spending that new money largely on substance abuse treatment and prevention, as well as law enforcement.

Attorney General Eric Holder, meanwhile, said in an interview with Huffington Post that he is "cautiously optimistic" about legalization in Colorado and Washington. Will other states follow suit? Here's Holder: 

I think there might have been a burst of feeling that what happened in Washington and Colorado was going to be soon replicated across the country. I'm not sure that is necessarily the case. I think a lot of states are going to be looking to see what happens in Washington, what happens in Colorado before those decisions are made in substantial parts of the country.

It's only a matter of time before the question comes before Arkansas voters via ballot initiative, though state Attorney General Dustin McDaniel recently rejected the latest effort for unclear wording, the seventh time dating back to 2011 that the office rejected similar measures. 

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