Colorado Pot Tax Proving More Lucrative Than Expected

[DonViejo]

By Matthew Yglesias

About a month into Colorado's adventure in legal marijuana commerce, Gov. John Hickenlooper is raising estimates of how much tax revenue it will bring in from $70 million all the way up to $98 million.

It is worth noting, though, that you really want to think about the fiscal impact of legal pot in a more comprehensive way. A key question about the public health impact of legal marijuana is how does it change alcohol consumption patterns. To the extent that legal marijuana displaces legal booze purchases, you're going to see an offsetting decline in alcohol tax revenue. Which would be fine—a big win for public health, in fact—but not quite the financial bounty states may be hoping for. Alternatively, if legal pot leads to a complementary surge in beer drinking, you'll have lots of tax revenue but potentially large problems.

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http://www.slate.com/blogs/moneybox/2014/02/20/colorado_pot_tax_revenue_more_money_than_expected.html?

[KurtNYC]

1. More pieces to the puzzle than just the pot vs alcohol taxes

Taxes and other revenue from pot tourists.
Cost savings on imprisoning people and other law enforcement expenditures.
Lower costs for traffic accidents.

[Egalitarian Thug]

2. Alcohol sales may decline slightly, but not to any significant degree.

People like to drink alcohol and people like to consume cannabis, but it's not usually an either/or choice.