Pubdate: Sun, 15 Feb 2015
Source: Albuquerque Journal (NM)
Copyright: 2015 Albuquerque Journal
Contact:  http://www.abqjournal.com/
Details: http://www.mapinc.org/media/10
Author: Christopher Ingraham, Washington Post

COLORADO'S LEGAL WEED MARKET

$700 Million in Sales Last Year $1 Billion Predicted by 2016

WASHINGTON - Legal marijuana was a $700 million dollar industry in 
Colorado last year, according to a Washington Post analysis of 
recently released tax data from the state's Department of Revenue. In 
2014, Colorado retailers sold $386 million of medical marijuana and 
$313 million for purely recreational purposes. The two segments of 
the market generated $63 million in tax revenue, with an additional 
$13 million collected in licenses and fees.

The total economic impact of the state's marijuana industry is likely 
greater, as these figures don't include retail sales of products 
related to marijuana, like pipes and bongs, and they don't account 
for increased tourist spending in other segments of Colorado's 
economy, like hotels and restaurants.

With a full year of data to work with, the state has a clearer 
picture of what to expect from its marijuana market going forward. 
Total marijuana tax revenues are now expected to climb to $94 million 
annually by 2016, according to the latest projections. This would 
equate to a $1 billion dollar retail market.

The revenue figures are high enough that Colorado now finds itself in 
the enviable situation of having to figure out what to do with all 
that money. And it's catching the attention of other states, like 
Vermont, now considering legalization.

But Colorado's pot businesses aren't necessarily rolling in dough. 
Marijuana growers and retailers aren't eligible for the wide variety 
of tax deductions available to other businesses, which could take a 
huge bite out of their profits. Banks are also hesitant to do 
business with the marijuana industry for fear of a federal crackdown, 
which makes legal weed a de-facto cash-only proposition, with all of 
the risks and dangers that entails.

The federal government has been taking steps -- albeit small ones -- 
to help integrate the marijuana industry with the rest of the market. 
Late last year the IRS issued a memorandum assuring accountants who 
file taxes for marijuana businesses that they won't face increased 
risk of an audit or penalties. And tucked within December's 
last-minute spending compromise was a measure forbidding the Drug 
Enforcement Agency from raiding medical marijuana outlets, provided 
those outlets are in compliance with state law.

Colorado has implemented a $700 million marijuana market without any 
of the dire consequences that legalization opponents warned about. 
Fatal car accidents in the state are flat, and well below the 
past-decade average. Crime is down in Denver and the surrounding 
area. While some societal effects of marijuana legalization may not 
make themselves fully known until several years down the line, the 
first year of legal weed in Colorado went smoothly.
- ---
MAP posted-by: Jay Bergstrom