Colorado Collects $3.5 Million on Marijuana Sales

The Colorado Department of Revenue says the state made $3.5 million in January from marijuana sales. Of that $2.1 million came from the recreational sales of marijuana use. Is it me or does the tax revenue seem a little low?

The state predicted that Colorado would see $35 million in revenue from retail sales by the end of June; if that is the case the $2 million from January is falling short of the goal. With those numbers, the state will have to see over six million in revenue per month until the June 30.

So why is the revenue so low? Does it mean the usage of marijuana has gone down or did the government just over estimate? I don’t think either one of those are the case. I think there are two reasons why the estimate on the tax revenue is missing the mark.

First, many counties in the state have voted not to allow medical or retail sales of marijuana. All of those counties have zero tax dollars to throw into the revenue stream. That doesn’t mean they have no usage in their counties, it just means they don’t tax the drug.

All of the "super-smart" people said there is no way they would allow this to happen and they didn’t. Instead of seeing tax dollars they have forced marijuana sales to stay on the black market tax free.

Another reason I think this number is low, is due to the number of home growers. In Colorado a person 21 and older can grow up to six plants as long, as it’s done in an enclosed, locked space. I know some communities had band the cultivation out right but I haven’t seen any witch-hunts going on for growers just yet, so I’m sure it is going on even here in Grand Junction.

Look at the guys who started the growing classes in Denver. Those have been a big hit as the classes are booked full in advance. That means at the end of each course another group of people go home, build out a grow room and before you know it they have a crop tax free.

So, is Colorado’s green rush over already? No but if the state wants to see real revenue from marijuana sales they will need to get control. I don’t mean like the state run liquor stores in Utah. Colorado will need to find a way to get those counties who have banned the retail shops to open their markets. Then I think we could see around six million a month in tax revenue which would put us on the estimated the government has predicted.

Let us know your thoughts in the comments section.

[Forbes]