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Colorado Marijuana Tax Essay

483 Words2 Pages

One of the biggest problems with the Colorado marijuana tax is it keeps legal customers on the black market because of the large price difference. Almost two years after the first retail marijuana store opened in Colorado, sellers are still fighting black market dealers, but that could end-by July of 2017. Governor John Hickenlooper signed a provision to lower the marijuana tax from 10 percent to 8 percent.
Lowering the Recreational Rates
The Colorado marijuana tax is a sin tax, this type of tax is important in balancing a state’s overall tax burden. Sin taxes walk a fine line, because if they are too high, consumers can save money on the black market, which has a negative effect on tax collection.
By lowering the Colorado marijuana tax, the …show more content…

How Bad is the Black Market?
When the recreational law went into effect, a common thought was those selling and buying on the black market could follow the rules and do everything legally. They understood that taxes would need to be paid, but those taxes wouldn’t be excessive and would go back into helping their community.
That dream went away quickly for more than a few sellers in the newly legal industry. With close to 200 pages of rules and regulations, competing with medical marijuana, as well as the total sales tax of 28 percent, legal merchants are having trouble making a profit.Those sellers that stay on the black market and return to the black market don’t have half the overhead that legal merchants have.
It’s hard to provide statistics on black market sales, especially when the state has medical and recreational vendors. Colorado’s largest bust since legalizing marijuana netted authorities 4,600 pounds of harvested marijuana, close to 2,000 marijuana plants, 10 pounds of has oil and almost $1.5 million in cash-not an insignificant seizure in a state where recreational marijuana is

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