POT BLACK MARKET FLOURISHES IN COLORADO AND WASHINGTON

It doesn’t take a nuclear physicist to figure out that pot heads would prefer to buy weed that is not taxed

In Colorado, licensed marijuana shops are whining that they cannot compete with the black market in pot. Hundreds of medical marijuana shops, many of them unlicensed, have popped up since recreational pot was legalized in the state. The tax on medical pot is considerably less than on recreational pot. And illegal sidewalk sales of pot are also flourishing. The State of Washington is experiencing similar problems. It doesn’t take a nuclear physicist to figure out that pot heads would prefer to buy weed that is not taxed.

According to the Tax Foundation:

Colorado collects tax revenue from marijuana sales through a 15 percent excise based tax on the average wholesale market rate; a 10 percent state tax on retail marijuana sales; a state sales tax of 2.9 percent; varied local sales taxes; and local marijuana taxes such as a 3.5 percent tax in Denver. In Denver for example, a $30 eighth of pot (1/8 oz.) will have about $8.59 in taxes tacked onto it, or about a 29 percent overall tax rate. (By comparison, the equivalent tax on cigarettes is about 31 percent and on beer only about 8 percent.)

Washington State collects tax revenue from marijuana sales through a 25 percent tax on producer sales to processors; a 25 percent tax on processor sales to retailers; a 25 percent tax on retailer sales to customers; a state Business & Occupation (B&O) gross receipts tax; a state sales tax of 6.5 percent; and varied local sales taxes. The total effective tax rate to be about 44 percent. By comparison, Washington taxes cigarettes at about 104 percent and beer at about 11 percent (recently cut from 16 percent).

According to the Associated Press, “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.” And Joseph Henchman, an analyst who has studied marijuana tax collections for the Tax Foundation, says, “If they’re looking at pot as something that might swoop in and save them, they need to keep looking.”

Not only are the millions of dollars in taxes that Colorado and Washington have collected on marijuana sales a mere drop in the bucket for multibillion dollar budgets, but the legalization of pot has had its downsides too.

Instead of eliminating the illegal street sales of pot, the taxes on legal marijuana have actually boosted street corner sales.

Legalization has led to a noticeable increase in the use of pot, both by adults and by children.

According to the Daily Mail, “School districts in both Colorado and Washington have reported more kids showing up at school with weed. There have also been more kids treated in emergency rooms for marijuana ingestion.” And states that legalize pot need a plan in place for how officers determine whether drivers are impaired by marijuana. After legalization, simply sniffing pot in a car or seeing a joint on the seat isn't enough to haul someone to jail.

So, the legalization of marijuana is far from the nirvana the proponent of pot keep promising us.