Question

Compare Washington state and Colorado’s recreational use of marijuana policy. Describe the differences in policies with particular attention to the tax structure of each.

Answer 1

Washington Marijuana Legalization and Regulation, Inititative 502 approved on Nov. 6, 2012 by 55.7% of voters legalized recreational use which would license and regulate marijuana production, distribution, and possession for persons over twenty-one; remove state-law criminal and civil penalties for activities that it authorizes; tax marijuana sales; and earmark marijuana-related revenues. . The law is specified as "Revisions to the Uniform Controlled Substances Act, chapter 69.50". Possession and Cultivation Limits include the Age to be over 2; Usable Marijuana: up to 1 oz; Plants are illegal. Any amount is a felony. Hash & Concentrates: up to 16 oz marijuana-infused product in solid form; up to 72 oz marijuana-infused product in liquid form; up to 7 g marijuana concentrate.

The Liquor and Cannabis Board (LCB) approves, regulates, and enforces marijuana licenses. The LCB also administers and collects the 37 percent Marijuana excise tax. Marijuana sales are legal and taxed in seven states. Most of these states tax the consumer purchase of marijuana (similar to a retail sales tax) but some tax the transaction between cultivators and distributors or retailers (similar to taxes on alcohol).

In Colorado, the Amendment 64 (with a vote of 55%) approved leagalised use of Marijuana (for recreational purposes) on Nov. 6, 2012. The Colorado Constitution: Article 18, section 16 has approved it. Possession and Cultivation Limits include the age to be over 21; Usable Marijuana: up to 1 oz; up to 6 plants with no more than 3 mature plants; Hash & Concentrates: up to 1 oz

In Colorado and Washington, where marijuana has been taxed since 2014, marijuana taxes bring in hundreds of millions of dollars, or roughly 1 percent of each state’s own-source general revenue. (Own-source revenue excludes intergovernmental transfers). Most states tax marijuana as a percentage of the retail price . These rates range from 10 percent in Nevada to 37 percent in Washington. California, Colorado, Massachusetts, and Oregon also use these taxes, which are similar to a retail sales tax the consumer pays on the purchase and the retailer remits to the state. Colorado additionally have a tax on the wholesale transaction between cultivators and distributors or retailers. The expectation is that some or all of these wholesale taxes are passed through to the consumer via higher purchase prices—similar to how alcohol taxes work. Colorado levies 15% state excise tax on retail sale; 15% marijuana tax on contract price (cultivator); localities can levy both a retail and/or a cultivator tax.

Washington dedicates its revenues to health care programs whereas Colorado’s revenue is dedicated to education programs.