The state of Colorado last week reported 2017 revenues generated by taxes, licenses and fees from state-legal sales of marijuana. Total revenues amounted to $247.37 million, an increase of nearly $54 million year over year.
Medical marijuana sales dipped by about 2.3% to $430 million, while recreational sales rose by 30% to $1.07 billion. Total sales rose by 19% year over year to $1.49 billion.
The 2.9% state sales tax generated $30.54 million in revenues, with $11.86 million from medical marijuana sales and $18.68 million from recreational sales. The 2.9% tax on of retail sales of recreational sales expired in June.
The state’s 10% retail sales tax rose from 10% to 15% on July 1, and the annual total generated by this tax was $131.51 million. The 15% retail excise tax generated $71.97 million in revenues for the calendar year. License and fee revenues for 2017 totaled $13.35 million.
Since state-legal sales began in 2014, total sales of marijuana amounted to $4.37 billion and total tax receipts have amounted to $638.98 million, or 14.6% of total sales.
Year-over-year revenue growth has declined as sales have risen. State revenues nearly doubled between 2014 and 2015. Revenues rose about 50% year over year in 2016 and increased by about 28% year over year in 2017.
The federal law that prohibits the U.S. Department of Justice from spending federal funds to enforce federal laws against marijuana where the plant is state-legal expired Friday, along with the federal budget extension that has shut down operations of many federal agencies. Coupled with the ruling earlier this month by U.S. Attorney General Jeff Sessions that federal prosecutors should make enforcement decisions based on existing law enforcement principles, including “priorities set by the Attorney General.”
But without funding, Sessions’ directive is toothless. The Justice Department can’t dictate how state law enforcement agencies spend their funds, and it is a relatively sure bet that states like Colorado are not going to volunteer to spend funds on shutting down legal businesses that contribute millions every year to state coffers. Of course, the federal government could try to tie other federal grants to the states to their diligence in enforcing federal law, but that path is already being challenged in court in immigration cases.
For a good description of how federal and state laws conflict and what may happen next, this article in America Magazine is worth reading.