Colorado’s tax collections from recreational marijuana sales in the past fiscal year came in more than 60 percent below early predictions, and now a state lawmaker says it may be time to reconsider the tax formula.
State Rep. Dan Pabon, who is chairing a special legislative committee on marijuana revenue this summer, said the medical-marijuana system may also come under scrutiny.
“There’s some real impact that the medical marijuana market is having on the recreational marijuana market,” said Pabon, D-Denver. “I think itap worth looking at the taxation on the recreational side but also looking at the rules and regulations on the medical side.”
Tuesday marked the first meeting of the committee, which is studying how Colorado spends its marijuana tax money. The first item of business: Why is there so much less of it than originally predicted?
When Colorado voters approved special taxes on recreational marijuana last November, estimated the taxes would bring in a combined $33.5 million through that fiscal year, which ended earlier this summer. Budgeters for had .
But the actual number came in at .
for the Colorado Department of Revenue says the lower-taxed medical-marijuana market, which continues to outpace the recreational market in sales, . Rather than pulling consumers out of the medical-marijuana market, the recreational market has largely feasted on tourists and people who previously bought pot on the black market.
“I think our original assumption about the cannibalization was wrong,” Colorado Legislative Council economist Larson Silbaugh said at Tuesday’s committee meeting.
The result, suggested David Blake from the Colorado attorney general’s office, is that the resilience of the medical-marijuana market “is being driven by avoidance of that tax.”
Dorinda Floyd, the chief financial officer for the Department of Revenue, said recreational sales continue to rise and are expected to eventually surpass medical sales “in the out years.”
Meanwhile, state economists have adjusted their predictions. A significantly for the current fiscal year — $30.6 million in special recreational marijuana taxes, compared to that Hickenlooper’s office had predicted earlier this year. A new forecast is due out in September.
“While I think our forecasts are getting better,” Silbaugh said, “they’re still based on just six months of data.”
John Ingold: 303-954-1068, jingold@denverpost.com or twitter.com/johningold
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