Colorado May Not Get Predicted Windfall From Marijuana Tax


A Colorado state-produced study has concluded that high taxes and fewer stores are keeping medical-marijuana consumers from switching to the recreational cannabis market, a trend that, if it continues, will have a major impact on the state’s predicted marijuana tax windfall, reports the Denver Post. The study found that out-of-state visitors make up nearly half of recreational marijuana sales in the Denver area and 90 percent of recreational sales in mountain resort communities. Tourists account for only about 7 percent of the annual demand for marijuana in the state, which the study estimates at 130.3 metric tons.

“This study finds total marijuana demand to be much larger than previously estimated,” the study’s authors write. The reason is that previous studies have underestimated the level of demand from heavy users. The new study finds that the top 22 percent of marijuana users in Colorado account for nearly 67 percent of the total demand. The bottom 54 percent of users account for only about 4 percent of demand. The repeort said few people are switching from shopping at medical-marijuana dispensaries to shopping at recreational marijuana stores. That could be because higher taxes for recreational marijuana and fewer available outlets discourage switching. Predictions for revenue from recreational marijuana taxes once reached $35 million for the first six months of 2014. Instead, the state has brought in only about $14.7 million so far.

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