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But experts caution pot tax revenue doesn’t necessarily solve state budget problems.
Recreational marijuana sales in Colorado are booming, with a state agency Thursday putting out sales and tax revenue figures that show August was the biggest month to date, with retail sales of $113 million.
Retail and medical marijuana sales hit the $1 billion mark that month, the earliest point in the year in the four years pot has been legally for sale in the state, according to The Denver Post. So far this year, Colorado has collected $200 million in taxes from marijuana, according to the state Department of Revenue.
These figures—particularly the tax figures—might get some attention from the two states considering legalizing recreational marijuana in November. Earlier this month, The Detroit News noted that a Colorado marijuana consulting firm calculated that Michigan could eventually see as much as $130 million in tax revenue from retail sales if voters approve legalization.
But legal marijuana sales don’t necessarily solve state budget problems. As Renu Zaretsky noted in a column for the Tax Policy Center, taxes on marijuana sales even in the first states to legalize—like Colorado and Washington—amount to around 2 percent or less of state budget revenue.
Another complication for legal marijuana businesses in Colorado could come from federal law enforcement, as the U.S. Attorney’s office last month told the Denver Post they would be looking at licensed businesses that are fronts for the illegal market.
But U.S. Attorney Bob Troyer, who took over the office in 2016 and is expected to soon be replaced with President Trump’s nominee for the position, also noted this could possibly mean a crackdown on legal businesses that are complying with Colorado’s law. “You can do plenty of harm to the community and still be in compliance with state law because those laws have a lot of loopholes and they’re very permissive,” Troyer later told the Associated Press.
The state’s latest revenue report shows that the industry has slowly grown this year. The number of licenses for adult-use marijuana business grew to 1,582 licenses total by the mid-year mark, including 538 stores. There were also 495 centers for people to purchase medical marijuana.
Recently, Colorado’s revenue department also released another report that concluded the illegal market has been largely taken over by the legal trade, with the head revenue official saying this showed the advantage of the regulated market.
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Laura Maggi is Managing Editor of Government Executive's Route Fifty and is based in Washington, D.C.