Why it matters: The Colorado Legislative Council Staff released a report showing how cannabis taxes are benefiting the state. Despite a decrease in annual cannabis tax revenue for FY 2021-2022 and FY 2022-2023, cannabis sales continue to provide a significant stream of funds for the state budget, surpassing other regulated substances.
What they are saying: The analysis reveals that in FY 2022-2023, Colorado collected $282.3 million in cannabis tax revenue, more than what was collected from cigarettes, tobacco products, nicotine products, and alcohol. The revenue comes from various taxes applied to recreational and medical cannabis sales.
The big picture: The distribution of cannabis tax revenue supports various programs and initiatives in the state, including substance use disorder services, affordable housing construction grants and loans, school health programs, mental health services, and more. K-12 education received the largest portion of marijuana revenue for school funding and construction, followed by the Department of Human Services.
What to watch: While the cannabis tax revenue in Colorado has seen fluctuations, it continues to generate significant funds for the state budget. The industry’s tax revenue also surpasses that of alcohol or cigarettes in other states like Washington and Arizona. However, there are concerns about the sustainability and potential collapse of the tax system imposed on the cannabis industry.
My take: The report highlights the positive impact of cannabis taxes in Colorado, demonstrating how the regulated industry can contribute to various sectors in the state. It serves as a reminder of the potential economic benefits of legalizing and regulating cannabis. However, the concerns raised about the tax system’s sustainability and its impact on businesses are important considerations that policymakers need to address for the long-term viability of the industry.
