The first recreational marijuana stores opened to the public on January 1st of this year, and two months later, it appears that Colorado’s recreational marijuana laws are a success.
Colorado Expects Substantial Income From Marijuana Sales
In a recent budget proposal, Colorado Governor Hickenlooper states that expected sales of marijuana (both medical and recreational) may produce $134 million for the state throughout the next fiscal year. The $134 million will come from fees and taxes levied on the expected $1 billion in sales. (Recreational marijuana is taxed at just under 25%.) Because the legal recreational marijuana industry is so new, the estimate may be over or under, and the projected number will change as more information becomes available.
The first $40 million of revenue will go to school construction. Beyond this, Hickenlooper’s budget proposes that $101 million go to various projects related to marijuana usage, such as substance abuse treatment programs and an anti-stoned-driving campaign.
Another source of income beyond taxes and fees are the so-called cannabis or marijuana tourists: people from other states who want to take advantage of Colorado’s legal dispensaries. Adults over 21 with an out-of-state ID can buy up to a quarter of an ounce of marijuana at a time (as opposed to an ounce for adults with a Colorado ID). They are not allowed to smoke in public places or in any private location without the owner’s permission. Tour operators have appeared to help cannabis tourists navigate these issues and get the most out of their visit.
Banks to Keep Close Tabs on Marijuana Businesses
Marijuana is still illegal at a federal level, making the lines between what is legal and illegal unclear. Echoing the stance of the Department of Justice (DOJ) on marijuana, the Department of Treasury (DOT) recently issued guidelines stating it does not intend to pursue marijuana businesses operating legally within state laws. Both Departments only want to pursue marijuana-related cases in order to prevent distribution to a minor, violence, drug cartels and gangs, trafficking of other drugs, and similar issues.
Although these guildelines effectively give banks the green light to accept businesses in the marijuana industry as clients, many banks are wary of doing so. Banks choosing to work with such businesses must file Suspicious Activity Reports (SAR) on each marijuana business it works with: one for businesses that seem to be behaving well, one for businesses that may be engaging in activities the DOJ and DOT are pursuing, and one for businesses it believes will implicate them in money laundering. These reports will contain information on names and addresses of people involved in the business, as well as details on any activity deemed “suspicious.”
Washington State Next
Washington State also legalized recreational marijuana, sales of which are expected to start mid-2014.
