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  1. #1
    Finally Resting In Peace medpot's Avatar

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    Default US: Colorado voters deciding how to tax pot

    Evansville Courier & Press


    Colorado voters deciding how to tax pot



    • KRISTEN WYATT, Associated Press
    • Posted November 1, 2013 at 7:41 a.m.



    FILE - In this April 24, 2013, file photo, A 1/4 ounce, left, and one ounce of marijuana are
    displayed along with a handful of joints at a dispensary in Denver. Nearly a year after
    Colorado legalized recreational weed, the state's voters are deciding how to tax the drug.
    (AP Photo/Ed Andrieski)

    DENVER — A pro-pot jingle in Colorado last year went like this: "Jobs for our people/Money for schools/Who could ask for more?" Nearly a year after Colorado legalized recreational weed, voters get the chance to decide exactly how much more — in taxes.

    On Tuesday, voters decide whether to approve a 15 percent pot excise tax to pay for school construction, plus an extra sales tax of 10 percent to fund marijuana enforcement.

    Some pot activists are campaigning against the taxes, arguing that marijuana should be taxed like beer, which has a tax rate of 8 cents a gallon. They've handed out free joints at tax protests.

    "Our alcohol system is regulated just fine with the taxes they have, so we don't see any need for this huge grab for cash from marijuana," said Miguel Lopez, volunteer coordinator for the small opposition campaign to Colorado's pot tax measure.

    While polls suggest the tax is going to pass — even in this state where voters frequently reject new taxes — it is very much an open question how much the state is going to reap.

    A projection prepared for voters by state fiscal analysts predicted the taxes would bring in $70 million a year. But an early draft of Colorado's first budget after retail sales begin, the 2014-15 fiscal year, doesn't include an amount they expect in pot revenue.

    Washington state isn't counting on pot revenue, either.

    Voters in that state set tax rates when they approved legalization last year. Taxes will be 25 percent, levied at least twice and up to three times between when the pot is grown and when it reaches the customer, plus sales tax.

    Marijuana's tax potential is an important question for the prospects for pot legalization in other states. If pot proves a tax windfall for Colorado and Washington, other states may be inclined to look favorably on legal weed.

    But if recreational pot smokers in the two states stay in the black market to avoid taxes, while the price tag for regulating a new industry balloons, marijuana legalization could suddenly look like a bad deal.

    That's why many in Colorado's marijuana industry are pushing the tax measure. They say that because most people don't use marijuana, the public needs to see a public benefit from making the drug legal.

    "Taxes are an opportunity for marijuana to show it can play a valuable role in the community," said Joe Megyesy, spokesman for the campaign promoting the tax measure.

    Support for the marijuana taxes extends even to politicians who opposed legalization in the first place, including Democratic Gov. John Hickenlooper and Republican Attorney General John Suthers.

    "I think everyone sort of realizes that the die has been cast. We're really doing this, and if we're going to move marijuana out of the shadows, we need to regulate it and tax it," said Sam Kamin, a University of Denver law professor who studies drug policy and served on the Colorado panel that helped write state marijuana regulations.

    Still unclear is how the new marijuana market responds.

    Colorado's medical marijuana framework will remain in place, with a much lower taxation rate. Heavy pot users could save a lot of money by paying nominal annual fees to be on the state medical marijuana registry and paying only regular sales taxes on their pot.

    Colorado also allows growing pot at home without a license, allowing users to avoid taxes entirely.

    Surveys suggest that 20 percent of pot smokers consume 80 percent of the pot, so the behavior of the heavy user has significant tax consequences, said Beau Kilmer, co-director of the RAND Drug Policy Research Center.

    It's too soon to say what will happen to recreational pot prices after retail sales begin next year. But if current prices hold, Colorado's proposed tax rate would add about $50 to an ounce of medium-quality loose marijuana, roughly the amount that would fit in a sandwich-sized plastic bag.

    Precise projections for the pot tax burden on the user are dicey.

    Like alcohol, marijuana can vary widely in potency, quality and price. Both Washington and Colorado plan to use taxes based on price. By contrast, alcohol is taxed by the gallon and cigarettes by the pack, regardless of how expensive the booze or smokes are.

    Another unknown is how much regulation will cost.

    Colorado has approved an ambitious seed-to-sale tracking scheme that includes extensive video surveillance of licensed growing sites and radio-frequency identification tagging. That could end up costing more than the 10 percent special sales tax produces, warned Colorado State University economists in a report issued in April.

    Kilmer said that Colorado and Washington are aware they're treading into uncharted waters on marijuana taxation. Voters and consumers, he said, should be prepared for big changes in pot tax rates and regulatory schemes.

    "Flexibility is clearly going to be the key here," Kilmer said.

  2. #2
    Flowering Member nohibition's Avatar

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    "Taxes are an opportunity for marijuana to show it can play a valuable role in the community," said Joe Megyesy, spokesman for the campaign promoting the tax measure.

    There ya go. Measure it's social contribution in dollars rather than the medical benefits it offers to so many people.
    I fall upon the earth, and I am embraced. Water gives me life, and I spring forth into the light. My roots run deep into the earth, and I am nourished. With wind and water, light and earth, I conspire to ease your pain and heal your wounds, to bring you peace and calm your mind, to give you wisdom and truth of heart.
    I return to the earth and I am embraced.I am Cannabis
    Nohibition

  3. #3
    Vegetative Member schmade420's Avatar

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    I'll be voting...

  4. #4
    Embryo

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    I do not live in Colorado, but I would not vote for more MJ tax than is levied on beer or tobacco. Considering how harmful tobacco and alcohol is cannabis should be taxed less than the other two not more. Just a matter of common sense and fundamental fairness.....

  5. #5
    Finally Resting In Peace medpot's Avatar

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    Default Marijuana Vote in Colorado Weighs 25% Tax for Recreation

    Bloomberg


    Marijuana Vote in Colorado Weighs 25% Tax for Recreation


    By Jennifer Oldham - Nov 5, 2013 12:01 AM ET




    David Paul Morris/Bloomberg
    Polls show a majority of voters approve of a proposed 15 percent excise tax on the wholesale
    price of retail marijuana that will go partly to fund school construction and a 10 percent sales
    tax to finance regulatory efforts.


    Just two months before Colorado retailers begin selling marijuana for the first time in the U.S., voters will weigh in today on a 25 percent tax to help fund enforcement efforts intended to forestall federal intervention.

    As the drug emerges from prohibition in Colorado, state officials and even existing medical marijuana dispensary owners say taxes are necessary to ensure there’s money to cope with uncertainties likely to crop up in a new industry being watched worldwide.


    “We don’t want to be at odds with the federal government and have them swooping down into our state,” said state Senator Cheri Jahn, a Democrat from Wheat Ridge who worked on a task force that devised regulations for the new industry.

    “We worked really hard to make sure we had tight statutes so there could be tight enforcement,” Jahn said. “Without funding, that cannot happen.”
    The proposed pot taxes are among several ballot measures in Colorado today. Other issues include a $950 million state income-tax increase to finance education, local initiatives to restrict oil and gas drilling, and whether voters in 11 counties want to secede from the state after lawmakers passed the toughest gun-control laws in a decade.

    Polls show a majority of voters approve of a proposed 15 percent excise tax on the wholesale price of retail marijuana that will go partly to fund school construction and a 10 percent sales tax to finance regulatory efforts. Even so, the passage of Proposition AA in a state with a long anti-tax history is not a sure thing.

    New Taxes

    If new taxes aren’t approved, money to police a product that is still illegal under federal law would come from the general fund, state officials warn. The department charged with regulating the state’s medical marijuana industry has said it doesn’t have sufficient resources to meet the demands of the existing 1,400 or so pot-related businesses.

    The 25 percent tax burden will come on top of local levies and a 2.9 percent state sales tax. A dozen municipalities are asking residents to vote on additional taxes on retail marijuana sales. If voters approve them, levies on cannabis could climb to as high as 35 percent in some areas.

    The city of Denver, home to the state’s largest number of medical marijuana dispensaries, is asking residents to approve a 3.5 percent local sales tax to pay for retail marijuana regulation.

    ‘Enforcement Apparatus’

    “Ultimately the whole enforcement apparatus will fall on the municipal government,” said Denver Mayor Michael Hancock, a first-term Democrat.
    “We’re going to need to make sure we have proper staffing to handle licensing and proper monitoring with enough inspectors,” he added. “We also have festivals and we have to keep the paperwork in line for those and special police officers who require special training, along with firefighters and medical health personnel.”

    Taxation ballot initiatives are among the last steps in a series of actions to implement constitutional Amendment 64, approved by a majority of voters in 2012, allowing those 21 and older to possess up to an ounce of marijuana. Washington state also legalized pot last year. Recreational marijuana sales there will include a 25 percent tax each on producers, processors and retailers.

    Pot Regulations

    After weeks of debate, the Colorado legislature approved a bill to regulate the industry -- amending it 130 times -- in the session that ended May 8. The legislation reflected many of the 58 recommendations made by a task force convened by Governor John Hickenlooper last December.

    The ballot initiative puts the state’s existing medical-marijuana firms, who initially are the only ones who will be allowed to apply for licenses to sell recreational pot, in a rare position of asking for a tax on their business.

    “It’s unusual, but we’re in a lot of unusual positions in this industry,” said Andy Williams, president of Denver-based dispensary Medicine Man. “Marijuana is under the spotlight. It’s changing peoples’ attitudes and perception of the industry and showing the federal government we can handle this change.”

    The federal government said in August it won’t interfere in the new recreational marijuana industry in Colorado and Washington if the states do a good job at regulating it.

    The campaign for the marijuana tax was backed by Hickenlooper, a first-term Democrat, and Attorney General John Suthers, a Republican, and the state’s largest medical-marijuana dispensaries. Opponents included small business owners, activists and students.

    Pot Giveaways

    Proponents raised about $67,000, compared with about $3,800 by opponents who took their case to the public by holding two free pot giveaways where they handed out 1,600 joints. Those in favor of Proposition AA, meanwhile, traveled the state speaking to local Lions and Rotary clubs in an effort to persuade older voters to approve new taxes.

    “My biggest concern with this, since there are a number of other tax measures that Coloradans are voting on, is that when voters get to the voting booth they will be inclined to vote no on everything,” said Joe Megyesy, communications director for the Yes on Proposition AA campaign.

    Some owners of smaller medical-marijuana businesses say additional taxes would harm them just as they’re trying to comply with new retail regulations. These rules require them to pay licensing fees twice if they want to sell products at retail and to separate production of their goods.

    This is a costly endeavor for entrepreneurs like Jessica LeRoux who sells dispensaries handmade cheesecakes, chocolates and salty snacks infused with marijuana.

    ‘Baked Product’

    “When you’re making a baked product and your overhead is eight times more than a strip club and you have more cameras than a casino, the market is already over-regulated,” said LeRoux, whose Denver-based company, Twirling Hippy Confections, is five years old.

    LeRoux and other tax opponents say high taxes on a new industry will deter tourists. It may also prompt Coloradans to grow their own pot -- Amendment 64 allows the cultivation of as many as six plants a person -- or force them to go to the black market, they say.

    “We want to give the marijuana industry a fair chance,” said Larisa Bolivar, executive director of the No on Proposition AA campaign, “and not overtax it so people go back to the black market, which in Colorado is thriving. Consumers are already telling me, ‘I will just go to my neighbor.’”

    Black Market

    Even with additional taxes added on, said Megyesy, the price of marijuana would still be below the black market. The levies would add about $7 to the $25 to $30 price for an eighth of an ounce of medical marijuana, which sells underground for $50, he added.

    A nonpartisan voter guide compiled by the state’s legislative council estimates the taxes will bring in $67 million per year. About $27.5 million of this would go to school construction and $6 million to local governments, leaving $33.5 million for state regulators.

    The $950 million statewide income-tax increase to fund education being considered today is backed by some prominent local businesses and New York Mayor Michael Bloomberg, who is majority owner of Bloomberg LP. Bloomberg has given $1 million to the school campaign.

    Energy companies are opposing the local drives to limit energy drilling. About 99 percent of the funding for committees opposed to the measures in four Colorado towns came from energy companies such as The Woodlands, Texas-based Anadarko Petroleum. Questions on the ballot in 11 Colorado counties asking residents if they wish to secede were promoted by local county commissioners.

    To contact the reporter on this story: Jennifer Oldham in Denver at joldham1@bloomberg.net

    To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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