Colorado marijuana sales tax, Proposition AA, is excessive
The following was submitted as Guest Commentary in the Denver Post. Please note the version in the Denver Post was edited by the Denver Post.
Colorado NORML has always stood as an advocate for the hundreds of thousands of Coloradans who responsibly consume marijuana. These consumers will bear the burden of any taxes enacted by voters on the retail sale of marijuana. Colorado NORML does not object to taxation of marijuana generally, but rather objects to taxation that is excessive or unnecessary.
Colorado NORML’s opposition to Measure AA stems from our belief that the existing sales tax structure and licensing fees should be sufficient to ensure a robust regulatory enforcement agency for marijuana. The 2013 Ballot Information Blue Book notes that “Revenue generated by the 2.9% state sales tax on both medical and retail marijuana and marijuana products, plus the revenue from application and licensing fees …will be used to fund the Marijuana Enforcement Division.” The Blue Book is projecting marijuana sales in 2014 to be $394.6 million dollars. At this level of sales, which Colorado NORML believes is conservative, the normal 2.9% state sales tax and 3.5% local sales taxes are projected to raise over $25 million in revenue to fund state and local regulatory enforcement. These projected revenue numbers do not include the numerous application and licensing fees paid by retailers to state and local regulators.
The Medical Marijuana Enforcement Division’s budget was $5.2 million in 2012. The state has already generated over $6 million in state tax revenue from medical marijuana sales through the 3rd Quarter in 2013. If necessary, the Colorado legislature could double the state regulator’s annual budget and still not require any additional “Special” sales tax measure which we think means that marijuana consumers in Colorado will be paying excessive taxes under Measure AA.
It is Colorado NORML’s position is that excessive taxation, along with the decision of many local jurisdictions to “opt-out” of Amendment 64’s business licensing provisions, has the potential effect to keep a black market for marijuana alive in Colorado. We will state, unequivocally, that the decision of local communities to ban retail recreational marijuana sales, thereby denying the safe access to marijuana by consumers in their communities, is the most substantial factor in supporting an unregulated market for marijuana.
We understand that we share our opposition to Measure AA with a number of diverse groups, but we must note that we have no affiliation to the group that chose to protest Measure AA with a free joint give-away in Civic Center Park. Rather, Colorado NORML has a long history of supporting responsible use of marijuana, including limitations on public use and driving impaired. See Principles of Responsible Cannabis Use.
Unfortunately, some may think it is normal to excessively tax an emerging industry based on hyperbolic fears of doom and gloom that have never played out in the last several years despite a thriving medical industry, but Colorado NORML simply cannot support a policy that betrays the promise of Amendment 64 to regulate marijuana like alcohol. Measure AA continues the history of treating marijuana like plutonium rather than alcohol. We can do better.