Ever wonder about the tax consequences on 420 (April 20th) in a state that legalizes recreational marijuana? The term “420” originated as a code word used by a group of high school kids in the 1970s for smoking marijuana. It has evolved into a way to show pride and marks a time to celebrate marijuana, according to CNN. Colorado’s revenue haul from marijuana sales may spur other states to adopt the 420 credo. Alaska is set to vote on a marijuana ballot initiative in November.
In Denver, to celebrate 4/20, a two day festival was held called the 2014 Cannabis Cup were an estimated 37,000 tickets were sold, according the Daily Nebraskan . The Cannabis Cup is a trade show and expo where attendees can visit various vendor booths and attend seminars on marijuana. Additionally, some estimate that around 80,000 people visited Denver last weekend, according to another CNN story .
It will be a few months before the Colorado Department of Revenue is ready to release the revenue numbers from April, so only time will tell whether the state’s pot revenue reaches a new “high.” But based on the numbers that are already in, revenue is on the rise. In the first two months of 2014 alone, Colorado took in over $7.5 million in total revenue from marijuana taxes, licenses, and fees, according to the January and February 2014 Sales Report s by the state revenue department.
Overall, in February Colorado brought in more than $570,000 more marijuana taxes, licenses and fees than in January, this represents a 16 percent increase in revenue in one month. The largest increase both in total dollar amount and percentage increase in the taxes levied was in the Retail Marijuana Excise Tax revenue, increasing by around 74 percent or $140,000. Additionally, license and application fees increased by almost $265,000 or 45 percent.
April may be a good tax month for the Colorado. If the estimated 80,000 people all bought at least one eighth of an ounce of marijuana for $60 , that would be around $4.8 million in sales for 420 weekend which could mean a possible tax revenue over $1.3 million, assuming a 27.9 percent combined tax rate on all sales.
How much could marijuana sales be worth going forward? One report forecasts that legal sales of recreational and medical marijuana may reach up to $8.2 billion in sales by 2018, according to a story in The Huffington Post .
In the meantime, will other states take the plunge to legalize, regulate and tax recreational marijuana? Alaska collected enough signatures for a ballot initiative to legalize recreational marijuana, according to the Marijuana Policy Project . The ballot initiative was scheduled for August but due to an extended legislative session the initiative is postponed till November, according to Politico .
In addition, Arizona, California, Delaware, Hawaii, Maine, Maryland, Massachusetts, Montana, Nevada, New York, Oregon, Rhode Island, the District, and Vermont, may also be heading toward legalizing marijuana, according to another story in The Huffington Post.
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