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
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
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.