State lawmakers consider a 40% sales tax on recreational marijuana

Recreational marijuana bill heads to legislature

DENVER - State lawmakers are considering a 40 percent sales tax for recreational marijuana. The Joint Committee plans to introduce a bill this week to the legislature, drafted from 58 recommendations by the "Amendment 64 Task Force."

Currently, medical marijuana is taxed like food and alcohol. For Denver residents that's 8%; the rate fluctuates with each city or county. The new proposal would implement up to a 15 percent special tax and 15 percent  excise tax, in addition to state and local sales tax. If passed, that would mean roughly 40 percent sales tax on  all marijuana products.

State Rep. Dan Pabon is the head of the Joint Committee and said the current tax rate is not enough to cover expenses to implement the new law.

"We've looked at the numbers and the estimates and we don't think frankly that's going to be enough to deal with the licensing piece of this," Pabon said. "We need a robust enforcement mechanism and we need to fund that enforcement mechanism."

The majority of the 15 percent special tax will go to enforcement, public education and health safety Pabon said. The first $40 million of the excise tax is earmarked for public school capital construction, which was written in Amendment 64.

7NEWS talked with dispensaries who worry the increased prices on marijuana would force customers to buy from the black market. Shop owners said they've paid large fees and licensing costs, which should fund enforcement.

For now, Pabon said the tax would only go to recreational marijuana. The Joint Committee will finish the bill this week and present it to the legislature. If the entire bill is passed, the tax would go on the ballot in November.