Colorado, the first state to tax legalized recreational marijuana sales, expects to bring in an estimated $98 million in revenue this year, exceeding the state's original expectations by 40 percent.
The state began levying sales and excise taxes on recreational marijuana on January 1, 2014. Moody's
Investors Service, in a report released Friday, said legal sales in Colorado will reduce the size of the black market and revenue from legal sales will mean more tax payments flowing into state coffers.
The funds are slated for treatment, school
and deterring young people from using the drug. School districts will likely get $40 million, or nearly 30 percent, of the projected $134 million in total marijuana tax revenues. New revenues will only make up 1.4 percent of the state's available general fund.
"There's been a lot of buzz around legalization," said Andrea Unsworth, a
analyst. But she cautioned that tax revenues were "still a very small fraction of the state's overall budget. It's not going to sway things too much in one way or another."
Colorado imposed a 15 percent excise tax on wholesale marijuana and a 10 percent sales tax on
sales. That's in addition to a pre-existing 2.9 percent tax on medical marijuana. Local governments will keep 15 percent of sales tax revenue, while the rest of the money will stay with the state.
Colorado legalized marijuana tax revs ahead of expectations: Moody's | Reuters