In Colorado, legal pot doesn’t pay—at least not yet. At the Daily Beast, Abby Haglage deflates a recent viral media meme that Colorado was raking in the money from legal marijuana sales. In fact, it’s the opposite: in 2014 the state brought in $25 million less in marijuana sales than expected. More:
In July, the Denver Business Journal showed analysts’ estimates for the yearly total of recreational pot tax revenue to be somewhere from $60 million to $70 million. The Denver Post called Gov. John Hickenlooper “bullish” about the potential tax revenue streams, which he estimated would exceed $100 million […]High predictions or not, the fact remains that Coloradoans bought less recreational marijuana than they could have—which means either they stopped using it or bought it somewhere else. With one in eight Coloradoans smoking marijuana in the last month, the latter seems more likely.Looking at the taxes on cannabis in the state, it’s not hard to see why. Pot taxes in Colorado are steep. In Denver, for example, an eighth of cannabis can come with four taxes: an excise tax, regular sales tax, special sales tax (for pot retailers), and a special city tax. That equals a markup of roughly 30 percent.
One of the theories behind legalizing marijuana is that it would undermine the role the “black market” played in supplying people with the drug. That would mean less money and power flowing to drug dealers or gangs, and fewer people behind bars who were caught selling on the black market. But as Mark Kleiman, the drug policy specialist brought in to set up Washington state’s market, has argued, unless you set the price of marijuana just right, the black market will persist—and might do so even if you get the price right. Colorado apparently has not yet reached the correct price point, which means less state revenue and more black market transactions.We may decide that legalization is the lesser of many evils when confronting the damage of the drug war, but when it comes to eliminating the black market, we still haven’t figured it out.