Pubdate: Sun, 15 Feb 2015
Source: Washington Post (DC)
Copyright: 2015 The Washington Post Company
Contact: http://mapinc.org/url/mUgeOPdZ
Website: http://www.washingtonpost.com/
Details: http://www.mapinc.org/media/491
Author: Christopher Ingraham

COLORADO'S LEGAL WEED MARKET: $1 BILLION BY 2016

Legal marijuana was a $700 million 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 
recreational purposes. The two segments of the market generated $63 
million in tax revenue and $13 million 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 related 
products, 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, the state has a clearer picture of what to 
expect from its marijuana market. Total marijuana tax revenue is 
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 in Congress was a measure forbidding the 
Drug Enforcement Agency from raiding medical marijuana outlets, 
provided those outlets are in compliance with state law.

The most encouraging news out of Colorado is that the state has 
successfully 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's 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 about as well as anyone could 
reasonably hope.
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MAP posted-by: Jay Bergstrom