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How Colorado Spent Its $1 Billion in Weed Money

Since 2014, the Marijuana Tax Cash Fund has largely gone toward education.
Colorado has raked in a whopping $1 billion in revenue since the state legalized marijuana five years ago.

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Colorado has raked in a whopping $1 billion in revenue since it legalized marijuana five years ago.

The state announced Wednesday that it has generated $6.5 billion in sales since it became the first in the nation to legalize the sale of recreational marijuana for adults in 2014. More than $1.5 billion of those sales came in 2018 alone, and 2019 is on track to earn even more.


That money has brought in a ton of tax revenue, which was a major selling point behind legalization in the first place. And it’s gone toward taxpayer-funded housing, education, and safety programs, according to state officials.

“Today’s report continues to show that Colorado’s cannabis industry is thriving, but we can’t rest on our laurels. We can and we must do better in the face of increased national competition,” Gov. Jared Polis, a Democrat, said in a news release. “We want Colorado to be the best state for investment, innovation and development for this growing economic sector.”

Overall, Colorado officials say the state has been left with an extra $1 billion in tax revenue, much of which has been devoted to the Marijuana Tax Cash Fund. Those coffers spend the money on more than 60 programs and grants addressing mental health, education, and more. (Lawmakers get to switch up where the pot cash goes each year and introduce bills to create new programs, according to the Denver Post.)

Of the Marijuana Tax Cash Fund’s budget, 16.4% has gone to education initiatives since retail sales were legalized, according to the state. That’s bankrolled school construction projects, youth literacy, and anti-bullying programs. Lawmakers even set aside $25 million in tax revenue to help school districts in the state set up full-day kindergarten programs, according to the Colorado Sun.

Charter schools can also submit requests for a share of the state marijuana funds, as they’re promised about 12.5% of the overall funding available through the Building Excellent Schools Today (BEST) program.


Overall, the Marijuana Tax Cash Fund budget has contributed to these four areas the most: human services, public health and the environment, education, and local affairs.

All it took was a 2.9% sales tax on medical marijuana, a 15% special sales tax on retail marijuana at the dispensary, and 15% excise tax on retail weed imposed every time it’s transferred from a production facility to a shop.

And that’s all before local taxes, which can add an extra 5% to 10% fee, according to Westword. For example, Aurora has an additional marijuana tax it says funds the Aurora Day Center, which gives homeless people a place to go during the day.

That doesn’t mean that marijuana tax revenue is always a straightforward upside to legalization, though.

For one, high taxes can simply drive low-income drug users to the black market. Plus, an over-reliance on marijuana taxes isn’t necessarily good. California has drastically slashed its expectations for marijuana tax revenue since sales began in 2018, and the state’s black market is still thriving.

More recently, drug policy advocates and even Sens. Kirsten Gillibrand and Cory Booker have said taxes should only benefit the same users who were punished by the U.S.’ history of harsh drug laws and racial inequity.

Cover image: In this Nov. 27, 2015, file photo, a bud tender holds two marijuana buds on his fingers on the way to a customer at the Denver Kush Club in north Denver. (AP Photo/David Zalubowski, File)