Get Active Subscribe Support Us

COLORADO TASK FORCE PONDERS HOW TO TAX LEGAL POT

DENVER ( AP ) - Pot smokers in Colorado were the biggest winners in the vote that legalized the drug.  Now state regulators are working out the details of exactly how to tax it, so the benefits are shared statewide in the form of increased revenue.

A state panel set up to regulate marijuana in Colorado agreed Thursday to recommend the highest tax contemplated by voters last year - a 15 percent excise tax, with the profits going to school construction.

The tax question is far from settled, though.

Colorado lawmakers could set a lower tax, or they could add sales taxes beyond the current statewide 2.9 percent.  Legislators could even create a special new "marijuana tax" for consumers, plus a series of required licensing fees for growers and sellers.  Besides schools, the taxes must fund marijuana safety enforcement and drug education measures.

Any option would have to go back to voters for final approval.

Marijuana proponents and critics agree that taxes should be hefty.  But if levies are too high, legal pot could be so expensive that people continue buying it underground.

"If this doesn't work and taxes are so high the black market still dominates, then what was the point?" asked Mike Elliott of Colorado's Medical Marijuana Industry Group.

Others argued that marijuana taxes should be sky high so that pot smokers pay for any damage to public health and safety.  Task members got a visit Thursday from Gov.  John Hickenlooper, a former brewpub owner who told the pot group that taxes and regulations in the booze business are exhaustive, too.  Hickenlooper opposed marijuana legalization and has since warned of costs to society including teen drug abuse.

"I'm not saying the sky is falling and it's the end of the world.  But most people expect ...  there will be some negative consequences" from legal pot, Hickenlooper said.

Fiscal analysts have no idea where to begin predicting how much tokers could produce in taxes.  The unknowns include how many people are buying pot now and what they're paying, how many people will start smoking marijuana now that it's legal, and whether prices will drop once commercial sales begin.  If the federal government blocks commercial pot sales, the marijuana tax windfall would be zero.

Colorado regulators reviewed mixed tax projections and seemed exasperated at even trying to guess what the market will be.

"It's all a mythical figure.  We're talking about an industry that doesn't exist today," said Tamra Ward, head of the group Colorado Connect.