Every time someone in Denver smokes a joint, the municipal government receives a couple cents in tax income. People have been busy, as the city recently enacted a half-billion-dollar tax on recreational marijuana sales.
“So, a lot of people ask us, Where did the tax money go?” said Eric Escudero with the Denver Department of Excise and Licenses. “$500 million is a lot of money.”
The city collected $54.8 million in local sales tax, state sales tax, and licensing fees last year. That appears to be a lot until you consider that the sum is down more than $17 million from the previous year.
They anticipate only $31.9 million in revenue this year.
“We do know that we may have hit the peak as far as what marijuana sales will look like,” Escudero said.
On January 1, 2014, the first legal marijuana sale occurred. Denver didn’t realize it at the time, but this was the start of a wave of green, both in dollars and cannabis.
Cannabis taxes have altered Colorado after spending half a billion dollars.
The majority of the funds are designated for homelessness and housing. This year, nearly $9 million will go toward affordable housing in a city that is getting increasingly pricey. Another $8 million will be used to run the homeless shelter on 48th Street. The remainder is divided among marijuana regulation and education, small company investment, and contributions to the city’s general revenue.
“That is all of the regular services. You think about libraries, you think about the potholes on the road. Those things still come out of the general fund and marijuana tax dollars contribute to it,” Escudero said.
Anyone who purchases merchandise from a dispensary must pay state and local sales tax. The state has its own allotment for where all the money goes, and some is returned to particular cities. This is where you’ll find stuff like school construction. The state loses money when consumers smoke less marijuana.
If you believed everyone who was quarantined at home didn’t smoke pot, you were mistaken. In 2020 and 2021, the city collected more than $70 million in taxes. In comparison, they hope to receive somewhat more than $30 million this year.
“Marijuana provides an important revenue source for Denver to address many areas, but it’s not enough money where the streets are going to be paved with gold. It’s going to help, but it’s not going to solve everything,” Escudero said. “Whether it be a rec center, whether it be programs for youth, whether it be filling potholes, it’s made a major contribution.”