Pubdate: Fri, 26 Apr 2013
Source: Denver Post (CO)
Copyright: 2013 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: John Ingold
Page: 13A

LEGAL MARIJUANA MAY NOT COVER COSTS, CSU STUDY SAYS

Legal marijuana in Colorado may not bring in enough money to cover the
societal costs of legalization, a new study from a Colorado State
University think tank concludes.

The analysis, by the university's Colorado Futures Center, also argues
that revenue from marijuana taxes won't do much to help Colorado's
budget and that money generated for new school construction won't
reach the $40 million annual target that supporters of marijuana
legalization set when campaigning for Amendment 64, the measure that
legalized use, limited possession and commercial sale of marijuana for
adults in Colorado.

"These questions are of even more concern in light of our expectation
that the most productive marijuana tax years will be the years just
after legalization," the center wrote in its report.

The study is one of several seeking to predict the unpredictable: What
will the state look like with legal marijuana.

The predictions largely hinge on how much legal marijuana people will
buy and smoke in Colorado. The Colorado Futures Center, citing federal
studies on drug use and other references, estimates that demand for
pot in Colorado will hit 2,268,985 ounces a year - more than 70 tons.

Using a retail price of $157 per ounce before taxes - and assuming
that proposals for a 15 percent excise tax and a 15 percent special
marijuana sales tax pass with both lawmakers and voters - the center
estimates annual tax revenues starting in 2014 at about $130 million.

That is well above what the state's nonpartisan Legislative Council
found in its voter-guide analysis of Amendment 64, although its $5
million to $22 million annual estimate didn't include an excise or a
special sales tax. The center's estimate also is above the $60 million
annually in savings and extra revenue that the Colorado Center on Law
and Policy predicted initially for Amendment 64 - although it, too,
didn't consider revenue from a special sales tax.

The Colorado Futures Center concludes in its report that the costs of
regulating recreational marijuana - plus possible extra costs for law
enforcement, public health and human services-may exceed the tax
revenue from the recreational marijuana industry.

Smart Colorado, a group opposed to all but the most limited
implementation of legal marijuana, jumped on the analysis as proof
that Amendment 64 was a bad deal.

"The latest research just confirms that marijuana proponents' promises
to Colorado voters that Amendment 64 would be a financial gain to the
state were empty," Diane Carlson, one of the group's leaders, said in
a statement.
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MAP posted-by: Matt