Thanks to the legalization of marijuana use in Colorado, the state is benefitting in several ways. One of them is that tax revenues have grown drastically in 2019. Even state officials were surprised at the significant rise from marijuana sales. For its first year (2008) as a legal recreational drug, marijuana earned the state $1.2 billion. By the end of the year, marijuana had made the state $245 million in revenue.
Special Sales Tax
There are three ways in which it generates tax money for Colorado. Medical marijuana incurs a sales tax of 2.9%. Retail sales of the drug are subject to an excise tax of 15%. In addition, a recreational dispensary near me earns a special sales tax, also at 15%.
Colorado has a tax fund specifically for sales of medical marijuana. The money in the fund is put to use by the government. It goes to law enforcement, construction, education, public health, and substance abuse services. New health care clinics to treat the mentally ill using money from this fund.
When it comes to the special sales tax collected from recreational sales, half of it goes to the Federal Government. The other half goes to local government silos. The excise tax money is split between a permanent fund for the state’s public schools after $40 million of it is used for school construction projects.
Between 2015 and 2019 $160 million of the revenue earned from recreational sales has been used by the Department of Education. The department has distributed that money in several ways. For example, $4.9 million each goes into programs to discourage students from dropping out of school and to fund programs that prevent school bullying incidents. Part of this money is also spent on educational grants for students who are in need of financial assistance.