In November of 2012 Coloradans made history by becoming the first of two states to legalize Cannabis for all responsible adults 21 years of age or older. On the Fifth of November in 2013 Colorado made the final leap forward and allowed its citizens to vote on a proposed tax for the recreational cannabis industry. The citizens spoke, the vote was passed, and there are now “proper” tax laws in place which will ensure that all regulatory agencies receive the necessary funding to properly carry out their enforcement duties. This is all outstanding news, that is, if you work for one of governing bodies. The tax percentage that was agreed upon totals 25% from the state with a proposed 3.5% city tax from the City of Denver (5% in Boulder). If dispensary owners decide to pass all of the taxes along to the consumer it means that the price per ounce will go up nearly 30% and consumers could pay upwards of $300+ for an ounce of premium cannabis. The biggest fear is that these hefty taxes will only fuel an already rampant black market. Chances are recreational consumers are not going to be too pleased when a red card wielding patient approaches the counter at the other end of a dispensary and pays almost $100 less per ounce for the same product. In actuality, a $55 doctor’s visit for a red card could conceivably pay for itself in just one visit to a medical dispensary, depending on the amount of medicine the patients uses. Once recreational users catch wind of this the medical industry will continue to flourish due to its lower taxes and the recreational industry (and in essence Colorado schools) will continue to spiral downward. No money for regulation might result in improper enforcement which could potentially have a negative effect on Colorado citizens.
So what is the solution to this poorly thought out tax plan? There is really no way to tell until things are implemented in January, 2014. The only way that I can see this working effectively is if OPC owners (the growers) and Collective owners agree to each take a 5% price cut (10% total) which will leave a 15% tax for the consumer to take on, a fair compromise which will leave prices at a reasonable rate and allow the recreational industry to blossom. As an industry worker I understand the need for taxation in order to fund these agencies, but I am also a realist who deals with cannabis consumers daily. Although this tax was hurriedly passed by the public, which as an outsider gives the façade of a cannabis community that is willing to play ball, there is a good chance that many of the voters are not cannabis consumers themselves, and solely voted due to the fact that they saw the potential figures to be earned by Colorado Public Schools. As for our shop, we are gearing up to open our medicinal doors to the general public in January like many others across Denver and Colorado. To be brutally honest we will survive no matter what. If recreational flourishes then that is great. If recreational falls through then we have a whole slew of new patients who are simply tired of paying recreational prices. At the end of the day it will be the consumer (likely tourists) who will determine the fate of the recreational industry. I honestly feel that it would be foolish for Colorado cannabis users who are over the age of 21 not to obtain a “Red Card”, even if only for the obvious monetary savings.