cannabisnews.com: Marijuana's Tax Potential Attracts New Allies
function share_this(num) {
 tit=encodeURIComponent('Marijuana's Tax Potential Attracts New Allies');
 url=encodeURIComponent('http://www.cannabisnews.com/news/27/thread27710.shtml');
 site = new Array(5);
 site[0]='http://www.facebook.com/sharer.php?u='+url+'&title='+tit;
 site[1]='http://www.stumbleupon.com/submit.php?url='+url+'&title='+tit;
 site[2]='http://digg.com/submit?topic=political_opinion&media=video&url='+url+'&title='+tit;
 site[3]='http://reddit.com/submit?url='+url+'&title='+tit;
 site[4]='http://del.icio.us/post?v=4&noui&jump=close&url='+url+'&title='+tit;
 window.open(site[num],'sharer','toolbar=0,status=0,width=620,height=500');
 return false;
}






Marijuana's Tax Potential Attracts New Allies
Posted by CN Staff on November 06, 2013 at 16:37:50 PT
By Kristen Wyatt, Associated Press
Source: Associated Press
Denver -- Colorado's hearty embrace of a 25 percent marijuana tax this week could prove a turning point for legalization backers. They've long argued that weed should come out of the black market and contribute to tax coffers instead of prison populations. But it's far too soon to say how much revenue the marijuana taxes in Colorado and Washington will actually produce when retail sales begin next year.A tax windfall in the two states could win over skeptical states that may be interested in pot legalization but wonder about costs of regulation. On the other hand, if many pot smokers in Colorado and Washington stay in the black market to avoid taxes, supporters could lose a major plank of their longstanding argument that legalization will take money from criminal cartels and benefit government programs.
"It's a crucial question," said Sam Kamin, a University of Denver law professor who served on a panel that helped write Colorado's marijuana regulations. "There's this premise that marijuana legalization can be a net-net win, spending less money putting people in prison and seeing a tax benefit from the sale of marijuana. Voters are going to expect to see both."Colorado's vote Tuesday showed it wants the benefits, even in a tax-adverse state that typically rejects proposed taxes. The pot tax question — on an excise and special sales tax that could add more than 25 percent to the sales price of weed — passed by nearly 2-to-1.That margin was much broader that Colorado's legalization vote itself in 2012. Many who opposed legalization then supported the taxes this time around. Last year's legalization measure also called for tax revenues for the state.Washington state has already settled its pot taxation scheme, charging 25 percent at three possible transfer points from production to retail sale, plus sales taxes.It's impossible to say precisely how much revenue the pot taxes will produce. A projection prepared for Colorado voters predicted pot taxes would bring in almost $70 million a year. Of that, $27.5 million would go to school construction, as specified in last year's ballot measure that legalized the drug.The rest of the money would go toward paying for the regulation of pot shops. Several Colorado municipalities approved additional pot taxes Tuesday, ranging from 3.5 percent in Pueblo County to up to 10 percent in the city of Boulder.Both Colorado and Washington are taxing pot based on the sales price, unlike alcohol and tobacco, which are taxed by the gallon or by the pack. The price of marijuana varies widely based on potency and quality and is likely to go down once recreational sales are legal.Based on crowd-sourced estimates of what black-market pot smokers pay, Colorado's state tax rate would add about $50 to a $200 ounce of loose marijuana, roughly the amount that would fit in a sandwich-sized plastic bag. Local taxes could bring the total consumer tax burden near 30 percent, or a total price of $260 an ounce.Denver approved a 3.5 percent tax Tuesday that could generate $4.5 million a year. The Denver Post has predicted state and city taxes will add $8.59 to a $30 eighth of an ounce of pot.Colorado saw a lively if small opposition campaign to the pot taxes, mostly legalization backers who argued high taxes would keep smokers in the black market. Colorado, unlike Washington, also allows people to grow pot at home, enabling marijuana users to avoid taxes entirely.Most of the nascent marijuana industry embraced steep taxes as a path to acceptance."Sure, the taxes are a little bit too high. But we've been asking for this for 40 years," said Robert Kane of Colorado Springs. Kane is senior vice president for Endocan Corp., which makes cannabinoid treatments for patients with cancer, HIV and other ailments, as well as hemp-infused cosmetics."I'll gladly pay an extra $5 or $10 every time I go to the store to shop in a regulated market and have the money go to my kids' schools," he said. "Let's do this, get the establishment started, show the world we can do this in a responsible way."Source: Associated Press (Wire) Author: Kristen Wyatt, Associated PressPublished:  November 6, 2013Copyright: 2013 The Associated PressCannabisNews  -- Cannabis Archiveshttp://cannabisnews.com/news/list/cannabis.shtml 
Home Comment Email Register Recent Comments Help 
     
     
     
     




Comment #2 posted by FoM on November 06, 2013 at 18:42:12 PT
John Tyler
I love your last sentence. Hillary will probably be our next President so she will need to study up on our issue and get it right. Bill said at the end of his term we need to decriminalize marijuana and that was way before the progress we have made now. That was in the year 2000!Clinton: Pot Smoking Should Not Be Prison Offense: http://cannabisnews.com/news/thread7920.shtmlPresident Clinton, who tried to avoid the stigma of smoking marijuana by saying he never ''inhaled,'' tells Rolling Stone magazine that people should not be jailed for using or selling small amounts of the drug.
[ Post Comment ]


Comment #1 posted by John Tyler on November 06, 2013 at 18:29:45 PT
what will the price be?
Now that the tax rate is set, what will the final retail price be? It has to be reasonable or the public will not be able to accept it. However, what is reasonable is a big question. 
An ounce that costs several hundred dollars is not going to work for a lot of people.
In a legal market cannabis is now just another commodity. It will be something you go to the store to pickup, like a bottle of wine, or a six-pack of beer. The consumer will immediately compare the cost of cannabis with other store shelf items. For instance, if an ounce of potato chips cost $1 and a pack of cigarettes (20 to a pack) cost anywhere from $5 to $10 (depending on the state. I am guessing at the price because I don’t use tobacco and haven’t checked prices everywhere) why should cannabis cost much more? 
It is legal in Colorado and Washington and consumers will have to pay a high price for it, but after a while I think the retail price will come down to a reasonable level.One more thing I want to see is respect for cannabis consumers.One last thing, cannabis has momentum now. So I hope the Democratic political types are listening. (I talking to you, Hillary.) (I could say Republicans but I don’t care for them, and don’t want them to get elected.) Get on board now and support full national legalization, or be left behind. (That is to say not get elected.) 
[ Post Comment ]


Post Comment