Marijuana revenue difficult to track in Aspen
July 22, 2014
Which of these is not like the others? Spas, health products, beauty supplies and marijuana.
Up to this point, the city of Aspen has included marijuana in its health and beauty tax category, but starting with the June sales tax report, it will be reallocated into a liquor and marijuana category, according to Finance Department’s Chris Lundgren.
Sales tax information on marijuana has become increasingly relevant in the past six months, as the rest of the country watches Colorado collect revenue on the recently legalized plant. Though early projections showed Colorado pulling in nearly $35 million from recreational marijuana taxes for the first six months of 2014, the state has only collected $14.7 million through May, according to The Denver Post.
In Aspen, numbers are somewhat ambiguous. Because there are so few shops, state and local governments are legally bound to withhold certain information so that proprietary data is not compromised.
Colorado Department of Revenue statistics show that Pitkin County contributed $47,129 in state revenue through recreational marijuana sales taxes in April and May. But it is unclear whether that number is for unincorporated Pitkin County — which has one recreational shop, Stash, at the Aspen Business Center — or if it includes Aspen, which has two recreational shops, Silverpeak Apothecary and Aspen Green Dragon.
“It is the Department’s practice to release aggregated data only when there are at least three taxpayers in a given category and none of them represents more than 80 percent of the total,” Natriece Bryant, a spokeswoman with the Department of Revenue, wrote in an email.
Government in Aspen is bound by the same reasoning.
“We have a threshold that if there’s an industry that has less than X amount of stores, we don’t release specific information,” Lundgren said, adding that it would make it easy for competitors to compare financials.
For what it’s worth, the department reports that Summit County, which has six recreational shops, contributed $207,007 in revenue from recreational sales over the same two months. The revenue is sourced by a 2.9 percent sales tax and an additional 10 percent sales tax approved by Colorado voters in November. These numbers don’t account for the state’s 15 percent excise tax on wholesale marijuana.
Meanwhile, medical marijuana sales continue to outpace recreational sales. Through May, medical dispensaries had done nearly $165 million of sales — compared with $90 million from recreational shops, according to The Denver Post. Tax revenue from medical marijuana sales, though, has amounted to slightly less than $5 million.
Art Way, senior drug policy manager for the Drug Policy Alliance in Colorado, said the state overestimated revenue streams for recreational marijuana: The Blue Book called for $67 million in revenue. The Colorado Center on Law and Policy, which the alliance worked with on analysis during the Amendment 64 campaign, estimated a more modest $60 million.
While neither of these projections have proven accurate so far, Way said he is not disappointed in what he has seen.
“I think we’re talking about some money that can be leveraged and used in places where we need it,” he said, adding that it’s not just about revenue but also savings — particularly with judiciary and law enforcement expenses.
The Center on Law and Policy estimates anywhere from $12 million to $40 million in savings in those areas. For year two and three of legalization, the center estimates around $120 million in revenue and/or savings.
Way said it’s also important to note that the roll out for recreational marijuana was slow.
“We probably have four times as many recreational dispensaries as we did on opening day,” he said. “The important thing is to do it right and take our time, and the state did that. And in doing so, the state may have undercut their own initial tax estimates.”