Cannitrol – Cannabis Control Agent

Marijuana news from around the world

Where did all of Colorado’s pot money go? The Post set out to answer that question

David Migoya

As Colorado began its fifth year of legalized recreational marijuana in 2018, The Denver Post decided it was important to let readers know about the state of the industry as its fifth anniversary loomed, a large part of which hinged on its financial successes.

Editors at the paper decided it was a worthy plunge to unravel the morass of paperwork and bureaucracy that makes up the state’s system of divvying the tens of millions of dollars collected in marijuana taxes each year.

With a mantra of “Where’d all that tax money go?” we first began by digging through the variety of layers that make up tax-spending in our state.

Over a four-month period, we were able to assess not only where more than $270 million in tax revenues had been allocated last year, but also drill deeply enough to learn to whom those dollars ultimately went and for what.

Along the way, we determined there was a stream of revenue  omitted from the typical recitation of annual collections – local sales and excise taxes that stayed in the locales where it was collected.

By using the state’s monthly reports on revenue sharing – 10 percent of the state’s sales tax was returned to the cities that collected it – we were able to reverse-engineer the formula to determine how much each locality had generated in overall retail marijuana sales. From that number we could apply the local tax rates to calculate how much was being collected locally.

We couldn’t figure for all cities – and the list was simply too long to call each one – because of state taxpayer privacy laws that prohibit releasing information that could identify a taxpayer. When a city had only one marijuana shop, it would be easy to know how much the business paid in taxes.

In all, local taxes were about $80 million of funding.

My colleagues — Jon Murray, John Aguilar and Anna Staver — divvied the work and set about telling the stories behind the tax money.

As we narrowed the scope of our reporting, it became clear that Colorado voters were largely misinformed – either by intent of the message or ignorance in thinking – when they passed Amendment 64 in 2012 to legalize recreational marijuana.

That’s because the amendment clearly set goals for only the first $40 million in excise taxes: It would be earmarked for school repairs and construction. Nothing was planned for what came after that amount.

What was never decided, yet voters presumed, was that all the tax money would be used for education.

Through an array of complex calculations and maneuvers, state government decided what to do with the money collected beyond that initial $40 million, an amount that’s now grown by more than $240 million and is likely to reach even higher.