Finding clarity on pot a taxing process

Posted 9/9/13

More than 10 months after Colorado voters approved the legalization of recreational marijuana use and sales, confusion reigns. Sure, passage of …

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Finding clarity on pot a taxing process


More than 10 months after Colorado voters approved the legalization of recreational marijuana use and sales, confusion reigns.

Sure, passage of Amendment 64 last November made a few things clear: Possession of up to 1 ounce is legal. People under 21 years of age may not purchase pot. It remains illegal to smoke marijuana in public places.

But a couple of the most basic questions still need to be answered: Where can one legally buy it? How much will it cost?

The first question is being explored by Colorado’s cities and counties. At this point, few Denver-area municipalities have opted to make retail sales legal, instead taking a cautious, wait-and-see approach. Some — like unincorporated Jefferson County — have already decided to outright ban retail sales. It’s possible most of Colorado could follow suit, leaving the state with a handful of “marijuana islands” where pot is legally sold.

The cost question is largely in the hands of the state’s voters. On top of whatever price point the marijuana market dictates, there will be taxes, and in Colorado, that means voter approval is needed.

A recent rally at the Capitol in Denver urged approval of a 15 percent excise tax and a 10 percent sales tax on the retail marijuana industry. If the state’s voters approve Proposition AA in November, money from the taxes would reportedly go toward school construction and regulation of the marijuana industry.

In general, we support approval of this proposition. It helps ensure the marijuana industry will pay for itself, and helps schools, to boot. But we do wonder if too many taxes could lead pot customers to turn back to the black market.

The 25 percent statewide tax from Proposition AA would be in addition to whatever taxes local municipalities’ voters approve.

Denver, for example, is asking residents to say yes to a 5 percent tax. The total tax toll of 30 percent could lead to an unaffordable product in what figures to be the state’s largest marijuana-selling zone.

Having customers once again turn to the dealer down the street would be a clear example of the law of unintended consequences. But we feel taxes may be the only way to keep the retail pot business from being a burden on Colorado, something the medical marijuana industry has been over the last few years. The state will have to bank on people’s willingness to pay the price for legality.

Even after the issues of where to buy and how much it will cost are officially answered, there will remain plenty of gray areas. For example, many people are uncertain if they will get fired from their jobs if they partake. Others aren’t clear on how much they can smoke and still legally drive.

Truth be told, it may take years — and more than a few legal challenges — before all the answers are in. But this November’s election and the actions of local governments in the months to follow should add important measures of clarity amid the lingering cloud of confusion.

marijuana, amendment 64, tax


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