FILE - In this Feb. 14, 2014, file photo, pot store
employee Sam Walsh informs a first time customer
about different strains of marijuana, a white board
listing prices and sales tax, inside the retail shop
at 3D Cannabis Center, in Denver. Colorado Gov. John
Hickenlooper announced on Feb. 19, 2014 a plan to
start spending nearly $100 million in marijuana tax
money, the first signal of how much Colorado is
reaping from recreational pot sales and what it
plans to spend the money on. (AP
DENVER (AP) — Colorado's legal marijuana
market is far exceeding tax expectations,
according to a budget proposal released
Wednesday by Gov. John Hickenlooper that gives
the first official estimate of how much the
state expects to make from pot taxes.
The proposal outlines plans to spend some $99
million next fiscal year on substance abuse
prevention, youth marijuana use prevention and
other priorities. The money would come from a
statewide 12.9 percent sales tax on recreational
pot. Colorado's total pot sales next fiscal year
were estimated to be about $610 million.
Retail sales began Jan. 1 in Colorado. Sales
have been strong, though exact figures for
January sales won't be made public until early
next month.
The governor predicted sales and excise taxes
next fiscal year would produce some $98 million,
well above a $70 million annual estimate given
to voters when they approved the pot taxes last
year. The governor also includes taxes from
medical pot, which are subject only to the
statewide 2.9 percent sales tax.
Washington state budget forecasters released
a projection Wednesday for that state, where
retail sales don't begin for a few months.
Economic forecasters in Olympia predicted
that the state's new legal recreational
marijuana market will bring nearly $190 million
to state coffers over four years starting in
mid-2015. Washington state sets budgets
biennially.
In Colorado, Hickenlooper's proposal listed
six priorities for spending the pot sales taxes.
The spending plan included $45.5 million for
youth use prevention, $40.4 million for
substance abuse treatment and $12.4 million for
public health.
"We view our top priority as creating an
environment where negative impacts on children
from marijuana legalization are avoided
completely," Hickenlooper wrote in a letter to
legislative budget writers, which must approve
the plan.
The governor also proposed a $5.8
million, three-year "statewide media
campaign on marijuana use," presumably
highlighting the drug's health risks. The
state Department of Transportation would get
$1.9 million for a new "Drive High, Get a
DUI" campaign to tout the state's new
marijuana blood-limit standard for drivers.
Also, Hickenlooper has proposed spending
$7 million for an additional 105 beds in
residential treatment centers for substance
abuse disorders.
"This package represents a strong yet
cautious first step" for regulating pot, the
governor wrote. He told lawmakers he'd be
back with a more complete spending
prediction later this year.
The Colorado pot tax plan doesn't include
an additional 15 percent pot excise tax, of
which $40 million a year already is
designated for school construction. The
governor projected the full $40 million to
be reached next year.
The initial tax projections are rosier
than those given to voters in 2012, when
state fiscal projections on the
marijuana-legalization amendment would
produce $39.5 million in sales taxes next
fiscal year, which begins in July.
The rosier projections come from updated
data about how many retail stores Colorado
has (163 as of Feb. 18) and how much
customers are paying for pot. There's no
standardized sales price, but recreational
pot generally is going for much more than
the $202 an ounce forecasters guessed last
year.
Mason Tvert, a legalization activist who
ran Colorado's 2012 campaign, said other
states are watching closely to see what
legal weed can produce in tax revenue.
"Voters and state lawmakers around the
country are watching how this system unfolds
in Colorado, and the prospect of generating
significant revenue while eliminating the
underground marijuana market is increasingly
appealing," said Tvert, who now works for
the Marijuana Policy Project.
Meanwhile, The Denver Post reported Wednesday
that banks holding commercial loans on
properties that lease to Colorado marijuana
businesses say they don't plan to refinance
those loans when they come due. Bankers say
property used as collateral for those loans
theoretically is subject to federal drug-seizure
laws, which makes the loans a risk.
Colorado's two largest banks, Wells Fargo
Bank and FirstBank, say they won't offer new
loans to landowners with preexisting leases with
pot businesses. And Wells Fargo and Vectra Bank
have told commercial loan clients they either
have to evict marijuana businesses or seek
refinancing elsewhere.
"Our policy of not banking marijuana-related
businesses and not lending on commercial
properties leased by marijuana-related
businesses is based on applicable federal laws,"
Wells Fargo spokeswoman Cristie Drumm told the
Post.
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