Part of the recreational marijuana tax dilemma – shortfalls in revenue – stems from diversions in revenue caused by the regulation of medical marijuana itself. But the real dilemma is caused more by inflated expectations. As NYU drug and crime analyst Mark Kleiman often expounds, time stabilizes recreational prices to a level that can compete with illicit supply, not to mention, those of medical marijuana as well.
Edited by DAVID LEONHARDT | April 9, 2015
Colorado’s marijuana tax collections are not as high as expected.
In February 2014, Gov. John Hickenlooper’s office projected Colorado would take in $118 million in taxes on recreational marijuana in its first full year after legalization. With seven months of revenue data in, his office has cut that projection and believes it will collect just $69 million through the end of the fiscal year in June, a miss of 42 percent.
That figure is consequential in two ways. First, it’s a wide miss. Second, compared with Colorado’s all-funds budget of $27 billion, neither $69 million nor $118 million is a large number.