Colorado legislature votes to tax recreational marijuana

Reuters News
Posted: May 08, 2013 2:31 PM
Colorado legislature votes to tax recreational marijuana

By Keith Coffman

DENVER (Reuters) - The Colorado legislature passed and sent to the governor on Wednesday a bill to establish what would be the first tax ever collected on commercial sales of marijuana purchased for recreational use in the United States.

The measure, which would impose a 15 percent excise tax plus a 10 percent statewide sales tax on retail pot purchases, was approved as package of measures to implement Colorado's landmark marijuana legalization law enacted by voters last fall.

Democratic Governor John Hickenlooper was expected to sign the legislation.

But the tax, seen as necessary to support the larger regulatory framework of the system, would then be subject to a ballot referendum under a Colorado law requiring all new taxes to be approved directly by voters.

In November, voters passed a constitutional amendment making Colorado one of just two states - the other was Washington - legalizing possession, cultivation and use of marijuana by adults for recreational purposes for the first time.

In Colorado, 53 percent of the voters supported legalization of pot, versus 47 percent who opposed it.

The outcomes in Colorado and Washington, already among nearly 20 states with laws on the books legalizing marijuana for medical use, put both states in further conflict with the federal government, which classifies cannabis as an illegal narcotic.

Under Colorado's new marijuana law, personnel possession of up to an ounce (28.5 grams) of marijuana is legal for anyone at least 21 years of age. Personal cultivation of cannabis is limited to six plants per person.

The statute also called for cannabis to be legally sold and taxed at private, state-licensed stores modeled after a regime many states have in place for alcohol sales.

Implementing legislation passed on Wednesday would give private dispensaries already in operation for distribution of medical marijuana first crack at the new retail sales licenses.

Washington state's voter-approved marijuana measure came with a built-in taxing scheme that will not be put into effect until the larger regulatory system is devised by that state's Liquor Control Board.

Approval of the tax and regulatory package in Colorado by the state House of Representatives and state Senate, both controlled by Democrats, came on the final day of the legislative session in Denver.

(Writing by Steve Gorman; Editing by Cynthia Johnston and Eric Walsh)