Thanks to a budget proposal released yesterday by Colorado Governor John Hickenlooper, we’re able to see the fist official estimate for how much the state expects to make on taxes from marijuana sales.
And it’s a lot.
Even Gov. Hickenlooper, who opposed marijuana legalization, has to be happy that he’s now predicting numbers for next fiscal year that hover around $100 million.
Retail sales began January 1st in Colorado, and while exact figures for January sales won’t be made public until early next month, this “pilot program” for legalized marijuana seems to have hit the ground running. Colorado’s total pot sales next fiscal year are estimated to be about $610 million.
And while Gov. Hickenlooper’s $99 million budget proposal does seem to ludicrously allocate $45.5 million for youth use prevention and $40.4 million for substance abuse treatment while only putting $12.4 million towards public health, it is one of the many signs that Colorado’s bank account and residents are happy the state went through with the legalization decision.
Pot tourism is now one of the fastest growing industries in the state — out-of-state pot guests comprise nearly half of Colorado’s $1 million dollars in daily marijuana sales — and weed-friendly hotels are popping up all around Denver. Not to mention all the money that used to be spent on marijuana policing, legal aid, and incarcerations. It even has counties that decided to continue to ban marijuana, like Larimer County, reconsidering their stance.
And other states are excited to jump on board.
The Huffington Postreports, “Washington’s new legal recreational marijuana market is expected to bring nearly $190 million over a four-year period starting in mid-2015, according to an economic forecast released Wednesday.” And the weed advocacy group Marijuana Policy Project believes that they will have 10 more states legalizing pot by 2017. Their targets include: Hawaii, Maryland, New Hampshire, Rhode Island, Vermont, Alaska, Arizona, California, Maine and Nevada.
It all sounds great, right?
Well, except for the fact that according to the Denver Post banks holding commercial loans on properties that lease to Colorado marijuana businesses say they don’t plan to refinance those loans when they come due. And Colorado’s two largest banks — Wells Fargo Bank and FirstBank — say they will not offer any new loans to landowners whose properties have a preexisting lease with a marijuana business, citing that their decision is based on the fact that marijuana remains illegal under federal law
And that all makes sense until you realize that Obama and his administration recently specifically cleared banks to accept funds from legal marijuana dealers. The Washington Post reports that “The Treasury Department issued new rules that could make it easier for banks to do business with marijuana dispensers,” and that “the Justice Department directed U.S. attorneys not to pursue banks that do business with legal marijuana dispensers as long as the dealers adhere to the guidelines issued in August.”
Yet still banks are closing their doors marijuana-related businesses. Shop owners have had to open personal accounts or set up shell companies in order to bank, but when it comes managing things like payroll or taxes things get a lot more complicated.
“We’re good customers,” argues Steve Horwitz, owner of the Ganja Gourmet in Denver, “We pay extra money for cash deposits, and we move a lot of money. It’s in their interest to keep us.”
However, as long as marijuana is classified in the same category as heroin bankers will remain reluctant to do business with dealers because of the federal laws, even if they are operating within the confines of state laws.
Reclassification or national decriminalization is going to be the only way to fix this problem, but that’s a long ways off and those Colorado businesses are going to have to keep the cat-and-mouse game going for a little while longer. Apparently the old saying is true:
Ass, gas, or grass; nobody rides for free.