Marijuana became legal for recreational use in Colorado on New Year’s Day 2014, but will it be a cash cow for local government? It’s estimated that the state will take in approximately $184 million in tax revenue from marijuana in the first 18 months after legislation, according to a report from the state’s Joint Budget Committee. Those numbers could be even higher, as lines were so long at dispensaries on New Year’s Day that some of them ran out of product, while others were forced to ration their supply.
That sounds great, but a large amount of the money is already earmarked for programs that deal with the drug’s darker side. The committee has submitted a request to allocate $103.5 million toward causes including youth prevention education programs and the treatment of substance abuse. The actual breakdown includes $45.5 million for the prevention of youth marijuana use, $40.4 million for treatment of substance use, $12.4 million for public health, $1.8 million for regulatory oversight, $3.2 million for law enforcement and public safety and $200,000 for something called “statewide coordination.”
How Colorado makes it’s money from marijuana
Colorado makes its money from marijuana three ways, by taxing the drug when it’s produced, sold and bought. This allows the state to collect tax revenue three times on the same product.
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