US: Colorado Task Force Favors Heavy Pot Taxes and Opposes Cannabis Cafés

Cannabis Campaigners' Guide News Database result:

After you have finished reading this article you can click here to go back.

Jacob Sullum

Reason

Friday 01 Mar 2013

The Amendment 64 Implementation Task Force met for the last time Thursday night, approving its final round of recommendations to the Colorado General Assembly about how best to regulate the recreational marijuana market that is supposed to start operating next year. In a word, strictly.

The Denver Post reports that the task force wants marijuana to be heavily taxed. Amendment 64 calls for an excise tax collected at the wholesale level "not to exceed 15 percent prior to January 1, 2017, and at a rate to be determined by the General Assembly thereafter." The task force says the initial rate should be the full 15 percent and recommends a special tax at the retail level on top of that, in addition to the standard state and local sales taxes. "Though the task force did not endorse a specific amount for the sales tax," the Post says, "it gave a 25 percent rate as an example." Both taxes would have to be approved by voters.

Since the task force also has recommended retaining a rule that requires marijuana sellers (who currently supply patients under Colorado's medical marijuana law) to grow 70 percent of the cannabis they sell, the distinction between wholesale and retail is pretty fuzzy. Amendment 64 says the excise tax should be "levied upon marijuana sold or otherwise transferred by a marijuana cultivation facility to a marijuana product manufacturing facility or to a retail marijuana store." But if the cultivation facility and the store are both part of one operation, as required by the 70-percent rule, the same entity will act as both wholesaler and retailer, collecting the excise tax from itself and then turning around to collect the sales taxes from customers. Depending on what the markups are at those two stages, the combination of a 15 percent excise tax and a 25 percent sales tax could raise the retail price, which is around $25 for an eighth of an ounce in dispensaries, by 50 percent or more. Since black-market prices are about twice as high as dispensary prices, that might be getting into dangerous territory.

The task force is also recommending that the state legislature ban marijuana consumption in pot stores, bars, restaurants, and even social clubs, which would rule out Amsterdam-style cannabis cafés, and explicitly prohibit people who are not licensed retailers from giving away marijuana while collecting "donations." On the brighter side, it previously recommended that visitors from other states be allowed to purchase marijuana, although perhaps in quantities smaller than the one-ounce limit imposed by Amendment 64. Since the amendment bars the state from requiring marijuana buyers to disclose where they live (they merely have to prove they are 21 or older), it is not clear how such a residence-based restriction could be enforced.

The Post does not say how the task force came down on issues such as labeling, child-resistant packaging, limits on THC content, or what it means to consume marijuana "openly and publicly," which remains illegal under Amendment 64. I will follow up with more details when I have them.

http://reason.com/blog/2013/03/01/colorado-task-force-favors-heavy-pot-tax

After you have finished reading this article you can click here to go back.



This page was created by the Cannabis Campaigners' Guide.

Feel free to link to this page!