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Colorado is Using Tax Revenue from Marijuana Sales to Fund Substance Abuse Programs in Schools

The state announced that 11 school districts will receive funding sourced from marijuana tax revenues to help prevent and treat substance abuse among students.
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Colorado has started distributing the tax revenue collected from the sale of legalized marijuana and funneling it back out into public programs aimed at preventing, treating, and regulating pot use.

The state announced last week that 11 school districts that had applied for grants would receive nearly $1 million in funding from marijuana tax revenues, with the state promising more than $1.5 million to future applicants. These grants will go towards hiring school nurses, social workers, and psychologists to help prevent and treat substance abuse among students, according to the Denver Post.


Much of the remaining revenue is being distributed to substance abuse treatment programs, school construction, and training and equipment for law enforcement agencies to deal with marijuana-specific problems, including driving while under the influence of marijuana, according to a bill passed by the legislature earlier this year. That the revenue from legalized pot is being directly used to prevent pot use and abuse was exactly the intent of lawmakers, according to one of the bill's sponsors, Democratic State Senator Pat Steadman.

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Steadman told VICE News that there has been a lot of debate in Colorado over the last two years about marijuana "paying its own way" by way of making sure tax revenues generated from marijuana sales are put towards some of the costs the state might incur as a result of legalization.

"Some of that is regulatory; some is making sure law enforcement is trained," he said. "We could foresee specific consequences of marijuana legalization and knew that first and foremost, the revenue should be used to mitigate those impacts."

In fact, when Colorado residents voted to legalize marijuana, the initiative on the ballot mandated that the first $40 million of excise tax revenue from pot each year would go toward schools, for building construction and maintenance costs, Steadman explained.


Kevin Sabet, president of Smart Approaches to Marijuana, was critical of the "roundabout" way of thinking from legislators who were willing to legalize the substance, only to use the profits to warn kids about its dangers.

"It's essentially allowing an activity which actually erodes the very thing that activity is paying to prevent," Sabet told VICE News. "You're allowing the sale of marijuana which is going to hurt kids and school outcomes, but you're using the money to help kids."

Sabet also expressed concerns about the marijuana industry's influence going forward.

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"If we think we're going to use it to pay for education, that's as laughable as alcohol taxes paying for itself," he said. "For every dollar we receive it costs us ten on medical and law enforcement costs. And last time I checked, the lottery is supposed to pay for education but it doesn't at all."

Colorado's pot market was intentionally linked to schools from the beginning, but in a careful way as to avoid school budgets becoming reliant on pot money, Republican State Senator Kent Lambert, a member of the Joint Budget Committee, told VICE News.

"The bill's sponsors didn't want to take the heat from some communities saying we're drawing a nexus between recreational marijuana and education, and education might become reliant on marijuana," he said, explaining that the money is going specifically towards renovations in school buildings, instead of operational costs. According to Lambert, this will make it less likely for schools or education programs to become reliant on marijuana money.


Marijuana is not the only substance to be directly linked through its taxation with programs meant to prevent its use. Lambert pointed out that revenue from cigarettes in Colorado funds certain health programs; as smoking has decreased over the years, the state is actually having a difficult time funding the programs meant to prevent and treat its use.

Many states, in fact, receive millions of dollars each year from tobacco companies that are meant to fund prevention and treatment programs specifically. In 1998, the country's biggest tobacco companies agreed to pay more than $200 billion to state governments in a lawsuit settlement due to the healthcare costs of smokers. The money, to be paid out over 25 years, was specifically designated to be used for prevention and treatment programs.

"Virtually none of that money has actually gone to help smokers quit," Robert Proctor, a Stanford history professor and author of Golden Holocaust: Origins of the Cigarette Catastrophe and the Case for Abolition, told VICE News. "But that was the original intent."

Proctor and others draw comparisons between the fledgling marijuana industry in states like Colorado and Washington and the tobacco industry, including the way it influences regulation and taxation. Though marijuana companies are not yet trying to influence taxation and legislation, that may be strategic for their future lobbying efforts, according to some experts.


Stan Glantz, director of the Center for Tobacco Control Research and Education (CTCRE) at UC San Francisco, said that companies — or other parties motivated by profit — often gladly accept taxation at first in order to push through legalization. In Colorado, business interests were willing to have marijuana be highly taxed and tied to school funding as a way to at least have marijuana become legal.

"People supporting marijuana legalization are willing to accept taxation as a way of opening up the market," he told VICE News.

Glantz said that corporations, including tobacco companies and others that want to be major players in the marijuana companies, are likely treading very carefully in Colorado in the hopes that the experiment there is proven successful enough that marijuana is legalized at the federal level. Once that happens, it could make way for a similar corporate entity within the tobacco industry, he said.

Glantz and Sabet both noted that the tobacco industry has studied the marijuana market for more than 40 years in case it ever became legalized.

"I think people are being naïve about legalizing marijuana and about the tobacco industry infiltrating the market," Rachel Barry, Glantz's research partner at CTCRE, told VICE News. "People who think it's a mom and pop shop industry need to step back and look at legalization at federal level."

According to Glantz, the tobacco industry has effectively undermined public health standards and influencing structures in their own favor when it comes to tax laws. "I wouldn't be surprised if you see marijuana lobbies follow similar strategies," she said.


Sabet said the marijuana industry is taking "pages right out of the big tobacco playbook."

"I think no doubt we are going down the path of creating Big Tobacco 2.0," Sabet said. "When you look at the techniques of the marijuana industry, they downplay risks, they produce marijuana candies and other fun items, they fund research and political advocacy and most of all they are corporate CEOs poised to make millions, the comparison couldn't be more perfect."

Though the marijuana industry is decentralized now, it will likely become more consolidated into large corporations that wield greater influence, Proctor said.

"You could say it's ironic," Sabet said. "It's the values of the hippies that got us here and the values of Wall Street that will win out at the end of the day. We're finding out that legalization is not about ending the war on drugs or letting people out of jail or social justice or even civil liberties. It's about money. It's about profits."

Steadman, however, was more optimistic. The state constitution, he pointed out, was now set up to do exactly as the voters wanted: legalize and tax marijuana, ensuring that profits go to schools and bear out the costs of the legalization.

"People wanted it legalized, regulated, and taxed because they had a sense that it would be a better and more rational approach than the old drug war approach," he said. "Rather than incarcerating people we would rather see them get treatment, so I think it was incumbent upon us to make sure some of the revenue was going toward mitigating the consequences and helping people.

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