Colorado provides tax model for Texas’s multi-billion marijuana market

ID-100141995.jpgEstimates reveal that the total US marijuana market is about $46 billion yearly. Because roughly 8% of the US population resides in Texas, it is reasonable to deduce Texas potentially has a $3.7 billion marijuana market (8% of $46 billion is 3.7 billion). The illegality of marijuana ensures that illicit actors will profit from this multi-billion dollar industry in Texas, instead of small businesses and local governments. Colorado has found a method to allow law-abiding businesses to earn profits from the marijuana market by legalizing and taxing the substance. Such taxes benefit governments and the public by providing revenues for projects such as school construction and drug-use prevention programs. Texas lawmakers could learn from Colorado’s groundbreaking efforts to improve drug policy through sensible law reform and good governance.
Generally, Colorado’s marijuana tax law levies a 10% sales tax on marijuana and marijuana products from a marijuana retailor. This 10% sales tax upon retailors is in addition to the 2.9% state sales tax and any local government sales tax imposed upon retailors. Thus, a purchaser of marijuana or marijuana products from a retailor would pay a minimum of 12.9% sales tax. The retail marijuana taxes do not apply to medical marijuana sales from a Medical Marijuana Center. Colorado’s marijuana tax law also imposes a 15% excise tax (that is, 15% of the average market rate of the marijuana) on sales from a marijuana cultivator. Excise taxes are taxes measured by the amount of business done, rather than property. The 15% excise tax will be on the cultivator’s sale of marijuana to a marijuana product manufacturer, a marijuana retailor, or another marijuana cultivator.
Though Colorado legislators passed the proposed marijuana taxes, Colorado voters must ultimately approve the taxes before the governor signs the taxes into law. Without voter approval, Colorado could be left without revenue to fund its extensive regulation of marijuana. Lack of voter support does not seem to be a concern however since the Public Policy Polling found that 77% of the 900 registered Colorado voters polled favored the marijuana taxes. Perhaps taxing is favored because Colorado legislators and voters realize the immense public good that could result from marijuana tax revenues. Researchers at Colorado State University have estimated (and have constructed an online calculator that helps one to make his own estimates) a total tax revenue of $94.4 million next year. Additionally, researchers believe Colorado will gain $12 million per year from law enforcement savings.
Texas and Colorado were among the first states to originally push marijuana into the illicit market through marijuana criminalization. Nearly a century later, Colorado has emerged as pioneer in devising smart solutions in response to the failed war on drugs. Texas’s fellow border-states, such as New Mexico and Arizona, have also moved forward in rethinking marijuana illegality. Texas should join the cadre of southwestern states that are reforming marijuana policy and allow law-abiding Texans to benefit.

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Gilbert Garcia has been Passionately Pursuing Justice for over 30 years and founded The Gilbert G. Garcia Law Firm in 2008. The Gilbert G. Garcia Law Firm is a boutique law firm, specializing in Criminal Defense. Gilbert represents adults and juveniles accused of a crime and who have with a felony, misdemeanor or record cleaning case. Conveniently located on the courthouse square to serve Montgomery and Walker Counties. Gilbert became Board Certified in Criminal Law by the Texas Board of Legal Specialization in 1989. The Gilbert G. Garcia Law Firm is located at 220 N. Thompson St., Suite 202, Conroe, TX 77301.  www.ggglawfirm.com.

Drug Related Charges may include: Possession of Marijuana, Possession of Controlled Substance, Possession of Dangerous Drug, Manufacturing a Dangerous Drug/Controlled Substance, Delivery or Intent to Deliver Marijuana/Dangerous Drug/Controlled Substance, Possession of Drug Paraphernalia and many other drug related charges.