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Earlier this week, Miguel Lopez, organizer of the annual 4/20 rally, expressed his opposition to Measure AA, the taxation proposal for recreational marijuana up for vote in November, by staging a Civic Center rally at which attendees were given free joints.
The Colorado chapter of NORML (National Organization for the Reform of Marijuana Laws) reached the same conclusion: They, too, oppose Measure AA. Board member Sean McAllister explains why.
According to attorney and activist McAllister, the proximity of Colorado NORML's announcement to Lopez's Civic Center gathering "was coincidental. We didn't know about the event on Monday; there's no affiliation, and NORML's board has been discussing the issue for weeks. But the Monday event did remind us that the issue is becoming important to focus on now."
As McAllister points out, NORML members took part in Governor John Hickenlooper's Amendment 64 task force, and he says concerns about excessive taxation have been shared throughout the process that led to the establishment of proposed levels: a 15 percent excise tax, plus a 10 percent state sales tax that can be increased to 15 percent if revenues fall short of covering costs. However, he says, the board's feelings "were brought to a head now. With a month and a half or two months from the election, people deserve to know what our position is on the issue."
Comparing marijuana and alcohol tax rates is a challenge, McAllister acknowledges, because "tax rates on alcohol are somewhat complicated. It's sixty cents on a liter, and most people buy one-and-a-half liter bottles. But from our assessment, you pay between 10 and 15 percent tax on alcohol if you include all the special taxes.
"Now, for marijuana, the first 15 percent is a tax on the wholesale from the grower to the retailer -- but our sense is that most of these operations will likely pass that on to the consumer. Then, the retailer will have to charge an additional 10 percent tax on top of all the regular taxes, and some local governments are adding another 5 percent on top of that. So marijuana consumers will effectively be paying 30-40 percent taxes on this product, and that amounts to a windfall for the legislature -- taxes that are two to three times the rate of alcohol."
Although no one knows at this point how much revenue recreational marijuana sales will generate, McAllister cites a Blue Book prediction of $130 million annually. "Even if you take $40 million off the top for schools" -- Amendment 64 establishes that a significant chunk of revenues go toward school construction -- "you're still left with $90 million for a regulator that currently has a budget of about $5 million. And even if you quadruple that budget, you're still at two or three times the tax revenue you need to fund all of that."