DENVER — Every time someone lights up a joint in Denver, the city government gets a couple cents in tax revenue. It turns out people have been busy; The city just passed half a billion dollars in taxes collected from legal marijuana.
“So, a lot of people ask us, where did the tax money go?” said Eric Escudero with the Denver Department of Excise and Licenses. “$500 million is a lot of money.”
Let’s dig into where that money does go.
Last year, the city brought in $54.8 million in local sales tax, state sales tax and licensing fees. That seems like a lot until you realize the total is down more than $17 million from the year before.
This year, they project to bring in only $31.9 million dollars.
“We do know that we may have hit the peak as far as what marijuana sales will look like,” Escudero said.
The first legal marijuana sale was made on Jan. 1, 2014. Denver didn’t know it then, but this was the beginning of a rush of green, both in dollars and weed.
Half a billion dollars later, cannabis taxes have changed Colorado.
The biggest percentage is allocated for homelessness and housing. Nearly $9 million this year will go towards affordable housing in a city that’s becoming increasingly unaffordable. Another $8 million is put towards operating the homeless shelter on 48th Street. Then the rest is split up between marijuana regulation and education along with small business investment and money put towards the city’s general fund.
“That is all of the regular services. You think about libraries, you think about the potholes on the road. Those things still come out of the general fund and marijuana tax dollars contribute to it,” Escudero said.
When anyone buys something at a dispensary, they’re paying state and local sales tax. The state has their own allocation for where all the money goes, and then they send some back to individual cities. That fund is where you see things like school construction. When people smoke less weed, the state gets less money.
If you thought everyone stuck at home during quarantine wasn’t smoking weed, then you’re wrong. The amount of money the city brought in from taxes was more than $70 million in 2020 and 2021. Compare that to this year, where they expect to get just over $30 million.
“Marijuana provides an important revenue source for Denver to address many areas, but it’s not enough money where the streets are going to be paved with gold. It’s going to help, but it’s not going to solve everything,” Escudero said. “Whether it be a rec center, whether it be programs for youth, whether it be filling potholes, it’s made a major contribution.”
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