Pot taxes prevail: Taxes will fund retail marijuana sales regulations
A year after Colorado voters made retail marijuana sales legal, voters on Nov. 5 cleared the way for pot smokers to fund the regulations that will be tied to the newly-created industry.
Voters overwhelmingly supported Proposition AA, a measure that will slap a 25 percent tax on retail pot sales that were made legal across the state as a result of last year's passage of Amendment 64.
The measure was receiving about 65 percent of support, with 91 percent of precincts reporting as of the early morning of Nov. 6.
Most of the money that will be collected through marijuana sales taxes will go toward regulating pot shops that will operate across the state, beginning on Jan. 1.
"This was about fulfilling the promise of Amendment 64, saying that we're going to regulate this industry, but were also going to tax in a way that lets marijuana pay its own way," said Rep. Jonathan Singer, D-Longmont, a sponsor of House Bill 1318, which put in place the marijuana tax system.
Singer's bill, which was signed into law by Gov. John Hickenlooper earlier this year, creates a tax structure that will impose a 15 percent excise tax and an initial 10 percent retail tax on each marijuana sales transaction.
The first $40 million collected through the Prop AA excise tax each year will go toward public school construction, with the rest being used to fund marijuana regulation.
Marijuana businesses must abide by strict rules when selling the drug, such as making sure that buyers are at least 21 years of age and limiting the amount of drugs that can purchased in a single transaction. The regulations are also aimed at preventing minors from having access to pot.
The Legislature also put in place a driving-stoned standard, which is aimed at curtailing efforts by motorists to get behind the wheel after smoking pot.
"We wanted to make sure that we had the right resources to make sure that kids don't get access to pot and that people aren't driving high," Hickenlooper said after the measure passed. "And that's what this initiative did. (It creates) a regulatory environment and an enforcement system that holds people accountable."
Opponents of Prop AA argued that the taxes would be too high and that they would only encourage people to buy the drug through the black market.
But voters across the state clearly didn't agree, and their support crossed typical partisan voting lines. Preliminary returns showed that Democratic counties like Denver and Boulder were seeing similar margins in support of Prop AA as were seen in conservative strongholds, such as El Paso and Douglas Counties.
Individual counties and municipalities can determine whether they will allow pot stores to operate in their jurisdictions. So far, cities like Denver, Boulder, Wheat Ridge and Thornton have given the green light to allow those businesses to operate. However, other cities like Colorado Springs, Thornton and Westminster have banned pot shops.
Fifteen percent of the retail pot taxes that are collected by the state will be funneled to local governments where pot sales are allowed. The revenue will be based on each city's percentage of pot sales.
"I think that once other communities see that the communities that allow this in their borders are raising revenues to help with their city coffers, I think that you'll see other cities come on board and say, 'We want to be responsible with this and make sure that it stays out of the black market,'" Singer said.