How Much Are Cannabis Taxes in Colorado? What Is Marijuana Tax Revenue Used For?
Cannabis industry is one of the most highly taxed in the country. So how much tax do you pay and where does it go?
There is a variety of taxes imposed on cannabis flower and infused products in Colorado. Today we will try to give you an outline of how much tax you pay and what it is spent on.
Colorado allows the sale of recreational and medical marijuana, and the main difference between these two is the tax you pay. Medical products also come in higher dosage and medical marijuana card holders have a higher limit on purchases and possession but the products are essentially the same.
Commonly, the prices provided in the dispensaries are pre-tax, as is the case with our online menu. However, for your convenience you will be able to see your total once you add products to our cart in our online order menu. Make sure to pick your location in the dropdown before you begin shopping.
What is Colorado recreational tax rate? How much is tax on cannabis in Denver?
In short, if you are shopping for cannabis in Colorado, expect to pay anywhere from 20 to 28% total tax on recreational marijuana and infused products.
The taxes on recreational cannabis in Colorado include state sales tax, Colorado special tax, Colorado retail marijuana sales tax, as well as local city and county retail marijuana sales tax which varies by location. You will be provided a detailed breakdown of the taxes paid on your receipt.
Is medical cannabis taxed in Colorado?
If you are a holder of a Colorado medical marijuana card, you can shop at medical dispensaries. The total tax on medical cannabis in Colorado comes to about 7-9%.
It is comprised of Colorado special tax, city and county sales tax (recreational cannabis is exempt), and Colorado medical sales tax.
As is the case with recreational sale, you will be able to see the details on the receipt.
Where does marijuana tax money go in Colorado? Where does Colorado marijuana tax go?
Let’s look at the recent numbers and where does it all come from. The money comes from various taxes mentioned above as well as licensing fees.
In 2021, the cannabis revenue in Colorado was $423M, a new record compared to $387M the year before that while tax and fee revenue was over $2B and $12B throughout the time since cannabis legalization.
According to Colorado General Assembly, 10% of the revenue from the 15% tax on marijuana retail sales is allocated to local governments in accordance with the percentage of marijuana retail sales occurring within city and county boundaries. The remaining 90%:
71.85% to the Marijuana Tax Cash Fund;
15.56% to the General Fund; and
12.59% to the State Public School Fund.
Revenue in the Marijuana Tax Cash Fund is spent on health care, health education, substance abuse prevention and treatment programs, and law enforcement. The marijuana excise tax revenue is credited to the Building Excellent Schools Today (BEST) Fund used to renew or replace deteriorating public schools.
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