Pubdate: Sun, 04 Jan 2015
Source: Rome News-Tribune (GA)
Copyright: 2015 Associated Press
Contact:  http://www.romenews-tribune.com/
Details: http://www.mapinc.org/media/1716
Author: Kristen Wyatt, Associated Press

LEGAL WEED BRINGS TAX BOOST, BUT IT'S MODEST

Denver (AP) - To see the tax implications of legalizing marijuana in 
Colorado, there's no better place to start than an empty plot of land 
on a busy thoroughfare near downtown Denver.

It is the future home of a 60,000- square-foot public recreational 
center that's been in the works for years.

Construction costs started going up, leaving city officials wondering 
whether they'd have to scale back the project. Instead, they hit on a 
solution - tap $3.2 million from pot taxes to keep the pool at 10 
lanes, big enough to host swim meets.

The Denver recreation center underscores how marijuana taxation has 
played throughout Colorado and Washington. The drug is bringing in 
tax money, but in the mix of multibillion budgets, the drug is a 
small boost, not a tsunami of cash.

Much of the drug's tax production has been used to pay for all the 
new regulation the drug requires - from a new state agency in 
Colorado to oversee the industry, to additional fire and building 
inspectors for local governments to make sure the new pot-growing 
facilities don't pose a safety risk.

And estimates for pot's tax potential varied widely.

Some government economists predicted a huge boost to public coffers. 
Others predicted a volatile revenue stream that could spike wildly 
based on how consumers and the black market would respond.

Some even guessed that legal weed would cost more than it produced in 
taxes, through higher public safety costs and possible expensive 
lawsuits because the drug remains illegal under federal law.

In Colorado, where retail recreational sales began Jan. 1, 2014, the 
drug has a total effective tax rate of about 30 percent, depending on 
local add-on taxes.

Through October, the most recent figures available, Colorado 
collected about $ 45.4 million from sales and excise taxes on 
recreational pot sales.

That puts the state on pace to bring in less than the $70 million a 
year Colorado voters approved when the agreed to a statewide 10 
percent sales tax and 15 percent excise tax on recreational pot.

But adding fees and licenses and the taxes from medical marijuana 
sales, Colorado had collected more than $60 million through October. 
Local governments can add additional taxes, too.

In Washington, where recreational pot sales began in July, 
recreational weed is taxed on a three-tier system as the plant moves 
from growers to processors to retailers. The total effective tax rate 
is about 44 percent.

State tax officials are just getting a look at the first few months 
of pot taxes, and the money is coming in slowly because there aren't 
many stores there yet. State economists have predicted pot sales will 
bring in $25 million by next July.

The state anticipates a $ 200 million increase by mid- 2017, and 
about $ 636 million to state coffers through the middle of 2019.

The U.S. Drug Enforcement Administration says marijuana in a Schedule 
I substance under the Controlled Substances Act and has no accepted 
medical use in the U.S.

Congress, however, included language in a December spending bill 
signed by President Barack Obama that prohibits the Justice 
Department from spending money to enforce that ban in the states that 
have legalized marijuana for medicinal use.

"If there's no constitutional conflict, it makes sense to allow 
scientists to perform the research," Coomer said. "I wouldn't be 
opposed to a bill that allows that. I don't want to take it lightly."

Lumsden and Hufstetler said they expect attorneys for both chambers 
of the General Assembly to thoroughly study any bill and ensure it 
meets constitutional muster.

State Rep. Katie Dempsey, RRome, wants to see Peake's bill move 
through the legislative process before forming an opinion.

Dempsey, who serves on the House's Health and Human Services 
Committee, examined Peake's medical marijuana bill last year. She 
supports clinical trials and restrictive use of the drug for medical reasons.

Dempsey's committee heard from those affected by seizures, some of 
whom have 100 each day. She supports any legal action that would help 
kids with seizures.

"I certainly hope we can do something to help," she said. "It just 
changes one's life to have a seizure."
- ---
MAP posted-by: Jay Bergstrom