DENVER – A dime bag is going to cost a few cents more.
Colorado voters, who made history in 2012 by legalizing marijuana for recreational use, voted Tuesday to impose heavy taxes on sales of the psychoactive plant in order to fund inspections and public-health efforts related to pot.
With nearly 1 million votes counted Tuesday night, Proposition AA was winning 65 percent to 35 percent.
The measure imposes a 15 percent wholesale excise tax and a 10 percent retail sales tax on recreational marijuana. The Legislature has the authority to raise the sales tax to 15 percent, and it is in addition to Colorado's existing 2.9 percent sales tax on regular items.
Joe Megyesy, spokesman for the AA campaign, said the seeds of the measure's victory were sown last year when Colorado voters decided to end marijuana prohibition.
“The success of Proposition AA was people realizing they want the system put in place. The system needs resources and funds to support it,” Megyesy said.
The passage of Prop AA means that an ounce of marijuana costing $200 would cost about an extra $40 in taxes if the store passed on its wholesale excise-tax bill to the consumer.
Amendment 64, which legalized marijuana in 2012, allowed an excise tax up to 15 percent, with the first $40 million to be used for school construction. Prop AA imposes the 15 percent excise tax, but state economists predict the market for legalized pot will be large enough for only about a $27 million gain for schools.
Economists expect the retail sales tax to earn the state an extra $40 million, 15 percent of which will be shared with local governments that allow over-the-counter marijuana sales.
The campaign was a low-budget affair on both sides. The major players in the Amendment 64 campaign – including pro-pot lobbying groups and the marijuana law firm Vincente Sederberg – took the lead in advocating for the tax. Although businesses rarely lobby to have themselves taxed, many pot-shop owners see the tax as a way to legitimize their business and show lawmakers they are responsible members of the community.
But the pro-legalization coalition didn't fully embrace Prop AA's taxes. Marijuana attorney Rob Corry led a group of marijuana businesspeople and users to oppose the taxes. By the end of October, the campaign had raised just $3,800, including – in what might be a first in American politics – $1,000 worth of joints from Corry that the campaign gave away at its rallies.
The anti-AA campaign argued that the proposed taxes were unfair because they are much higher than alcohol taxes and high taxes would drive people back into the black market.
The taxes take effect Jan. 1, 2014, the same day the first retail marijuana sales will be allowed.
The taxes apply only to retail marijuana stores. Under Amendment 64, people still will be allowed to grow their own marijuana tax-free.
Medical marijuana patients will continue to pay the regular 2.9 percent sales tax, but not the extra taxes in Prop AA.
jhanel@durangoherald.com
Related news
Results, articles, photo, video, resources and more election information.
