Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Marijuana tax revenue lower than forecast so far
Author: Scarinci Hollenbeck, LLC
Date: May 19, 2014
Key Contacts
Back
One of the strongest cases for the legalization of marijuana in Colorado was the untapped business tax revenue that might be had by states that allowed the drug to be sold. However, officials in the state are now scaling back first-year estimates for total sales and business tax revenue from the $1 billion in sales for the coming fiscal year predicted earlier this year, according to Bloomberg Businessweek. During January and February, the first two months that recreational marijuana could be sold in Colorado, the state collected roughly $4.2 million in sales and excise taxes – less than half of the range of $5.5 million to $8.9 million that was estimated by state legislators in 2013.
“I don’t think it’s the savior for state budgets,” Phyllis Resnick, lead economist at the Denver-based Colorado Futures Center of Colorado State University, told the news source. “It brings in additional revenue, but it also brings in additional costs for administration of the system and regulation and monitoring. It’s not free money.”
State officials are suggesting that the low sales levels are due to an unexpectedly slow licensing and approval process in Colorado for vendors to sell marijuana, Businessweek explained. Uncertainty caused by marijuana’s ongoing illegal status at the federal level may also have led to a shortage of supply.
It is possible that sales will pick up in coming months as more shops get licensed to sell marijuana and supply increases. In April, legislators expected to bring in approximately $134 million in taxes from the marijuana industry, Reuters reported. Around 30 percent of this sum is earmarked for school districts, with the rest going to treatment, school construction and deterring young people from using the drug. New revenues, however, will only make up about 1.4 percent of the state’s available general fund.
- Industries: Cannabis
- Practices: Tax and Trusts & Estates, Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.