This week the Colorado Department of Revenue released tax figures for the state’s first month of legal recreational marijuana sales and they are already comparable to tax receipts from alcohol sales, delivering on the promises of marijuana activists that legal marijuana could mean big revenue for state governments.
Revenues Are Substantially Higher Than Early Media Estimates
According to state revenue officials, Colorado made $2 million in tax revenue from the state’s 59 recreational marijuana businesses this January.
That figure is much higher than the amount projected by NBC in early February based on proprietary data shared by marijuana retailers. Based on 27 days of tax data from 18 recreational marijuana retailers, NBC estimated a tax haul of $1.24 million.
Already Comparable to Tax Revenue from Sales of Alcohol
The state Department of Revenue reported $39.9 million in revenue from sales of alcohol in 2013, averaging to $3.3 million per month.
Factoring in state revenue from medical marijuana sales in Colorado this January, the entire marijuana industry total was $3.5 million, which means marijuana has already brought more revenue to the state in its first month than the monthly average for sales of alcohol.
Bolsters The Fiscal Case for Legalizing Marijuana in Other States
Consider California for example, which is estimated to raise as much as $105 million in revenue from medical marijuana annually (an average of $8.75 million per month).
If recreational marijuana outperforms medical marijuana at the same rate it did in Colorado, California could raise an additional $11.6 million in taxes from its first month of recreational marijuana sales.
Or estimated differently, if California legalizes recreational marijuana and the entire industry (medical and recreational) raises as much revenue as alcohol like Colorado’s industry did in its first month, the Golden State could raise as much as $27.8 million in its first month.
Don't Forget The State's Businesses, Jobs, and Economy
While Colorado recreational marijuana tax revenue was $2 million in January, the businesses themselves made $12 million in gross revenue, attracting literally thousands of job seekers in what CBS Denver has dubbed Colorado’s “green rush.”California could raise an additional $11.6M in taxes from its first month of recreational marijuana sales.
The burgeoning legal “pot” industry is stimulating Colorado’s economy with new jobs (that pay state income tax) and business expenses that help other tax-paying, job-producing industries (like Colorado’s real estate sector, which leases 3 million square feet to marijuana businesses).
All told, these early indicators signal that Colorado’s voters have made a lucrative decision for the economic health of their state.
Photo Credit: WDAY News 6