A revised budget proposal submitted by Colorado Governor John Hickenlooper on Wednesday indicates that his office believes revenues from marijuana sales will hit nearly $1 billion dollars by July of 2015, the Denver Post reports.
According to a proposal submitted by the Governor’s budget office on Feb. 18, Hickenlooper expects state revenue from taxes on marijuana sales -- both recreational and medicinal -- to reach almost $51 million dollars by the end of the 2013-14 fiscal year in July, and cross $130 million by the end of fiscal 2014-15. Extrapolating those numbers based on the tax rate of recreational and medical marijuana sales, the Denver Post estimates recreational sales revenues to surpass $600 million dollars by the end of FY 2014-15, in addition to nearly $350 million in medical marijuana sales.
From the pot to the money, that’s a lot of green.
Nevertheless, the proposal was careful to point out that these figures can fluctuate as Colorado begins the process of collecting the first taxes in the world on legal recreational marijuana.
“It is important to note that these amounts are estimates based on a number of assumptions of the new industry, including consumption patterns, market price, the number of retail stores entering the market, and other economic and control variables,” the report says. “We anticipate that these projections will change monthly as more data is collected and actual revenue could fall short of these projections.”
The Post says that these are the first estimates the state has released since recreational pot sales began in Colorado on Jan. 1, and that they are “significantly higher than previous projections.”
Last year, Colorado collected $9 million dollars in taxes from medical marijuana sales and the budget office expects that figure to raise to $10 million this year. However, the real tax boon comes from recreational sales, which the governor’s office expects will bring in $35 million to the state’s coffers by the end of this fiscal year, and a whopping $117 million next year.
So where will all that tax money go? Colorado voters approved an additional sales tax on recreational marijuana in November, the first $40 million of which must go toward school construction. After that, Hickenlooper’s budget office recommends the tax money be allocated towards “resources to protect public safety and health and to prevent underage use.” According to the budget proposal, these include:
• Youth marijuana use prevention ($45.5 million);
• Substance abuse treatment ($40.4 million);
• Public health ($12.4 million);
• Regulatory oversight ($1.8 million);
• Law enforcement and public safety ($3.2 million); and
• Statewide coordination ($0.2 million).
As evidenced by those figures, the Governor’s office wants to place an emphasis on underage use, exposure, and prevention.
“We view our top priority as creating an environment where negative impacts on children from marijuana legalization are avoided completely,” the budget proposal said.
If the financial figures in the budget proposal prove true, there’s little doubt that Hickenlooper will have the necessary funds to help make that happen.