Medical-marijuana Sales Tax Nets $2.2 million for Colorado this Year

November 23, 2010 – Medical-marijuana dispensaries are now putting hundreds of thousands of dollars a month into state and city treasuries in Colorado.

So far this year, the state has collected more than $2.2 million in sales tax from dispensaries. In Denver, which has more dispensaries than any other city in Colorado, the businesses have also paid more than $2.2 million this year in local sales tax. Colorado Springs has collected about $380,000 in local sales tax.

“It’s just another excellent example that shows that medical marijuana isn’t just amazing for patients but it’s also productive for non-patients — for neighborhoods and cities,” said Betty Aldworth, the executive director of the pro-dispensary industry group Coloradans for Medical Marijuana Regulation.

The money is certainly welcomed in government budget offices across Colorado, which have struggled to keep the books balanced during the recession. But, in the overall budget picture, the infusion is little more than a speck. Colorado, for instance, took in more than $1.8 billion in sales-tax money during the fiscal year that closed at the end of June, according to the governor’s Office of State Planning and Budgeting.

In Colorado Springs, dispensaries represented 0.5 percent of the city’s October sales-tax revenue. In Denver, they are on pace to be about 0.7 percent of the city’s projected $417 million in sales-tax revenues this year. By comparison, restaurants — the city’s sales tax champs — bring in about $6 million per month, city budget director Ed Scholz said.

“So it’s not a significant amount of money,” Scholz said.

Still, medical-marijuana advocates said the revenues show that their industry deserves a place in local economies.

In Denver, for instance, monthly marijuana-related sales-tax receipts since March have stabilized around $265,000, which Norton Arbelaez, the owner of the River Rock Wellness dispensary, said shows medical-marijuana businesses can provide a consistent revenue stream. He also said sales-tax receipts should nudge upward if Colorado’s medical-marijuana patient registry — now at about 115,000 people, according to the state Department of Public Health and Environment — continues to grow.

Arbelaez — who is also the chairman of the board of the Medical Marijuana Industry Group, a statewide trade organization — said the revenue is an argument for the continued legitimization of the dispensary system.

“This isn’t new money,” Arbelaez said. “Patients, before we had medical marijuana in Colorado, were spending this money in the black market. … This is money that the city and state get a piece of as well.”

State Attorney General John Suthers — who authored an opinion that medical-marijuana sales in Colorado should be taxed but who has also contended dispensaries are beyond what state voters intended when they legalized medical marijuana — said through a spokesman that the new revenue stream doesn’t change his opinion of dispensaries.

Suthers also said focusing just on revenue ignores other impacts dispensaries may have on the community.

He noted a report by Education News Colorado showing that drug-related suspensions at schools in the state are up by nearly a third, something some attribute to the more open availability of marijuana.

Aldworth, with Coloradans for Medical Marijuana Regulation, conceded that the revenue numbers probably won’t persuade cities that have banned dispensaries to reconsider.

“People don’t get excited about medical marijuana because of the tax revenues,” she said. “That’s just another bonus. People get excited about medical marijuana when they see its effects on the patients.”

By John Ingold. Source.

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