On Tuesday, Colorado Gov. John Hickenlooper signed into law the first framework for a legal, regulated marijuana market in the United States.
Colorado expects the sale of pot to be a significant boon to state finances.
They’re already planning for a hefty tax on the substance, and one look at the potential size of the industry has those involved salivating.
At the end of last month, when the bill was still under consideration, the Colorado Futures centre at Colorado State University released a report detailing the expected fiscal impact of the shift.
Even though the analysis doesn’t include the economic benefits — we’ve already detailed several auxiliary firms that work for legal marijuana business that are poised to make a fortune from the security, financial data and advertising and product research needs of the new marijuana industry — it’s still an exciting look into one of the most interesting emerging markets on the planet.
There law states that there is a 15% excise tax imposed at the transaction point between marijuana cultivators and retail stores. Then, there is a 15% sales tax imposed at the point of retail sale to consumers. There’s also the 2.9% state sales tax as well.
Here’s the coolest things we learned from the report:
- The adult recreational market for marijuana will be worth $605.7 million. This doesn’t even include the market for edibles — pot brownies, for example — that comprise a significant aspect of the market.
- The report estimated that 554,710 Coloradans — around 10% of the state’s population — will use marijuana in 2014. This is a conservative estimate.
- Factoring in the Medical market, the Colorado market for marijuana will be 642,772 people , 12.4% of the state population.
- With a per-person usage rate of 3.53 ounces per year, the post-legalization estimate of demand for marijuana is 2.4 million ounces — roughly 75 tons — in 2014.
- This doesn’t even factor in marijuana tourism.
- The 15% excise tax will yield an estimate $21.7 in revenues for Colorado in 2014
- A 15% sales tax will yield $90.9 million in 2014
- The 2.9% state sales tax will yield $17.6 million.
Who would that thought that selling marijuana could be profitable?
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