Legal Weed In Colorado Doesn’t Curb Alcohol Sales

DENVER (AP) – Legal marijuana in Colorado hasn’t cut into alcohol sales, according to figures reported as Colorado prepares a one-day waiver of some marijuana taxes on Wednesday.

According to state tax data made final on Tuesday, the final numbers cover the first full fiscal year in which adults over 21 could legally buy both marijuana and alcohol.

Alcohol excise tax collections were up 2.4 percent, to about $42 million. Marijuana-specific taxes came in at about $70 million.

Colorado legalized pot for adults over 21 in 2012, and retail pot sales began in January of 2014.

But the state follows a July-to-June fiscal year, meaning the state just now has a final tax tally for an entire fiscal year in which adults over 21 could legally choose beer or weed. Numbers for a previous fiscal year aren’t final until mid-September.

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The figures don’t count overall statewide 2.9 percent sales taxes. In other words, alcohol likely still produces more overall tax money than pot, though the state doesn’t keep data on how much general sales tax comes from alcohol.

Recreational pot is taxed much more steeply than alcohol – 25 percent, plus statewide and local sales taxes. Alcohol is taxed by volume: 8 cents a gallon for beer, 28 cents a gallon for wine and $2.28 a gallon for liquor, plus sales taxes.

Colorado saw a sales increase last year in all three tax classes of alcohol. Beer was up 1.1 percent, liquor was up 3 percent, and wine was up 1.3 percent.

The final accounting comes as Colorado prepares to waive some taxes on recreational pot for a single day to account for an error in the 2013 pot-tax ballot measure. Voters were given an estimate for overall state tax collections that proved short, triggering a mandatory reset of the new tax. State lawmakers later decided to resurrect the marijuana taxes after a single day.

The one-day pot tax holiday – a constitutional quirk that won’t be repeated – is estimated to cost the state $3 million to $4 million in lost tax revenue.

The odd sales tax holiday had pot shops scrambling to attract crowds, though the state had no estimate on how many people might be expected to shop on Wednesday.

The 10 percent sales tax cut could knock about $20 off the price of an ounce of mid-grade marijuana, which goes for about $200 this summer in Denver. The 15 percent excise tax is paid before marijuana makes it to store shelves, making that price drop unlikely to show up at stores right away.

The pro-legalization Marijuana Policy Project lauded the sales tax holiday as “a much-deserved day off” for marijuana consumers, who carry a heavier tax burden than people who buy alcohol.

However, it’s far too soon to say how marijuana legalization has affected adults’ behavior when it comes to consuming intoxicating substances.

A University of Colorado-Denver economist who has studied how marijuana availability impacts alcohol consumption said the Colorado numbers don’t show much.

Economist Daniel Rees pointed out that beer sales growth didn’t even keep up with population growth in the last year, estimated at about 1.7 percent between 2014 and 2015.

“I wouldn’t read too much into one state’s experience,” Rees said.

– By Kristen Wyatt, AP Writer

(© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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