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Colorado Pot Sales Up Slightly In 2nd Month

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(credit: CBS)

(credit: CBS)

DENVER (AP) – Sales of recreational marijuana rose slightly in Colorado in the second month of retail sales, according to state tax estimates released Tuesday.

But the modest growth left state lawmakers cautious on spending the pot tax money just yet.

An estimate from the Colorado Department of Revenue showed that Colorado made some $4.1 million from medical and recreational pot taxes and fees in February. That’s up from about $3.5 million in January, when retail sales began.

But much of the increase came from fees collected from medical marijuana businesses, not additional sales.

The sales taxes on recreational pot edged up just slightly, about $30,000. The February collection, from about $1.4 million to about $1.43 million, suggested the recreational pot market didn’t grow much despite the opening of additional pot shops.

In January, Colorado collected taxes from 59 recreational marijuana businesses. That number went up to 83 businesses by the end of February, a number tax analysts said grew to about 190 by the end of March. March tax returns aren’t due yet and won’t be reported until May.

Colorado lawmakers who write budget measures started work on the pot tax figures Tuesday. Lawmakers from both parties said they’re anxious about spending the pot taxes until they have more months of tax reports.

“We still don’t know a lot,” said Sen. Kent Lambert, R-Colorado Springs. “There’s a lot of volatility in this.”

For now, Colorado’s overall $23 billion budget next year doesn’t rely on any marijuana taxes. Instead, lawmakers will consider a separate bill just concerning pot taxes.

Colorado voters last year decided that the first $40 million of recreational pot excise taxes should go to school construction. The entire sales tax from pot – set at 12.9 percent, in addition to local sales taxes – is up to lawmakers to appropriate.

Gov. John Hickenlooper has proposed spending the money largely on youth harm prevention. The governor also wants to spend money on training additional police officers to check for stoned drivers and start a pilot project to study marijuana use during pregnancy.

But lawmakers who will ultimately decide how the money is spent seemed leery on Tuesday of divvying up money that hasn’t come in yet.

“What is the level of urgency and threat that makes us want to hurry up and spend the money before it even comes in the door?” asked Sen. Pat Steadman, D-Denver.

Hickenlooper trimmed his marijuana request by $20 million last week. But the governor’s pared-down proposal still adds up to about $54 million, more than lawmakers feel certain Colorado will collect.

Instead, members of the Joint Budget Committee said they’d like to treat marijuana tax proceeds like gambling taxes. That means that they’d collect marijuana taxes but delay spending them by a year so that they don’t commit to funding a program only to see its volatile tax source shrivel.

The level of caution wasn’t shared by all, though. Rep. Cheri Gerou, R-Evergreen, said that Colorado can’t wait to start spending some of the pot tax money on youth marijuana-use prevention and drug treatment.

“It’s pretty easy to keep kids out of casinos,” Gerou said. “But we cannot control this particular substance the same way we do gambling.”

Gerou said children could be hurt by marijuana legalization while waiting for lawmakers to act.

“The horse is already out of the barn,” Gerou said.

Others disagreed, previewing future debates on how, and how quickly, to spend pot taxes.

“It’s not like children became exposed to marijuana for the first time the night” Colorado voted to legalize pot, Steadman countered. “I’m not sure I feel the same urgency to act right away.”

The JBC resumes debate on spending pot taxes on Thursday.

(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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