Marijuana: Denver's projected revenues from recreational pot won't cover expenditures

COLORADO: How much pot is going to be sold next year in Colorado as a result of Amendment 64’s passage is one of those great unknowns that has given officials across the state a big headache as they try to predict tax revenues.

Costs associated with the legalization of this once forbidden plant are another variable throwing local governments for a loop. The City of Denver’s financial department took a shot in the dark and presented its estimates of expenditures and revenues to a Denver City Council committee on Monday. The council is currently considering a flexible 5 percent sales tax with the possibility of increasing it to 10 to 15 percent — which, when added to proposed state taxes on recreational marijuana, would make it a 25 percent tax for the consumer.

This is comparable to the tax on cigarettes, which ranges from 14 to 23 percent depending on the price per pack, according to Cary Kennedy, Denver’s chief financial officer.

“Everything you are going to see is a forecast and it’s a forecast without a base,” Kennedy told councilmembers. “We don’t have any experience on recreational marijuana sales, so the analyst from the budget office relied heavily on the state’s assumptions when they calculated their estimates and forecasts.”

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