High time to tax pot, voters say

Proposition AA draws wide support

Purchasers of retail marijuana will pay a higher tax than medical marijuana buyers thanks to voter approval of Proposition AA on Tuesday.

The measure, which will allow the Colorado Legislature to impose up to 15 percent in excise taxes and 10 percent in additional sales taxes on recreational marijuana sold in special stores, was approved by voters by about 65 percent of the vote.

Those taxes will come in addition to the same local and state sales taxes that people who purchase the weed at medical marijuana stores pay.

Proponents of the new taxes said it was only fair — and proper — for voters to approve the new taxes primarily because they sold the idea of legalized recreational marijuana as something that should be treated and regulated just like alcohol.

“The passage of Proposition AA completes the historic process of regulating and taxing marijuana in the state of Colorado,” said Brian Vicente, proponent for the Committee for Responsible Regulation and co-director of last year’s Amendment 64 campaign. “The people of Colorado helped us fulfill the promise of the Amendment 64 campaign to steer tens of millions of dollars annually to public school construction. We have also ensured that there will be sufficient funds to enforce the regulations governing marijuana cultivation and distribution in the state.”

The ballot question, which won overwhelmingly in all 64 counties, is expected to raise as much as $70 million a year in additional state tax revenues.

Under it, the first $40 million raised by the excise tax, a special tax reserved for specific goods, will go toward school construction projects. That money would go into the state’s Building Excellent Schools Today program, created by the Legislature in 2008 to build new schools and repair existing ones. Currently, that program is funded through revenues earned from the School Lands Trust Fund and surplus lottery funds.

The measure also calls for 10 percent of the sales tax revenues to go to those communities that allow the retail sale of marijuana to address impacts from those sales. The money will be divided between the communities based on the percentage of retail sales in each jurisdiction.

While the measure calls for an initial 10 percent sales tax on marijuana, it also allows the Legislature to raise that to as high as 15 percent. That tax is in addition to the state’s 2.9 percent sales tax and any local sales taxes.

Last year’s voter-approved law that legalized recreational marijuana also called for the establishment of a regulatory scheme to oversee retail marijuana stores. Revenues earned by the state from the new taxes will go toward paying for that regulatory oversight, with all leftover revenues going directly into the state’s coffers.

Last year’s measure also allowed local communities to opt out of allowing the retail stores, something that Mesa County and Grand Junction have already done. While Palisade has the only medical marijuana center in the Grand Valley, the city has not yet decided if it will permit retail marijuana stores.

Fruita also is expected to decide the matter sometime next year.

The first retail marijuana stores are set to open after Jan. 1, starting only with those that currently also sell medical marijuana.

Mesa County voters passed the proposition like the rest of their statewide counterparts, but did so less enthusiastically. The measure passed in Mesa County with about 59 percent of the local vote.


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