Colorado is suspending taxation on recreational marijuana for just one day: Wednesday, September 16.
The break on the sales tax would shave $20 off the price of a mid-grade ounce of pot in the Denver area, where ounces this summer sell for about $200 before tax. There's also a one-day holiday for the 15 percent excise tax that is paid when recreational pot is sold from the grower to the processor or retailer.
"At first I was in disbelief we were doing this," said Cheri Hackett, who owns Botanacare, a dispensary in the Denver suburb of Northglenn. "Once our lawyer said, no, we really are doing this, we started getting ready. We're thinking there will be huge crowds."
"Our hopes are high, and we're going to push as hard as we can to see as many customers as we can," said Ryan Fox, who owns two dispensaries in Denver.
But recreational marijuana won't be completely tax-free. There will still be a 2.9 percent regular sales tax and local city or county taxes will also apply.
This pot tax holiday is a byproduct of Colorado's existing tax rules and the relatively new recreational marijuana taxation system.
Colorado's Taxpayer's Bill of Rights requires voter approval for new taxes. In 2013, a year after legalizing recreational pot, voters approved the 25 percent taxes. But the law requires that any new taxes be waived and refunded if overall state collections exceed projections given to voters when they approved the new taxes.
In this case, the pot taxes were projected to raise $70 million in 2014. They actually raised $58 million, but because overall tax collections that year exceeded projections, Colorado must ask voters for permission to keep the money. And to comply with the requirement that the taxes revert to zero, lawmakers settled on a short one-day tax waiver.
A bill, signed into law on June 4 by Gov. John Hickenlooper, designated Sept. 16 for the tax holiday because that is one day after the state's books for the previous fiscal year are made final.
For pot retailers, the holiday poses a bizarre supply dilemma. They'll want plenty of weed on hand to sell to throngs of pot shoppers. But if they stock too much product, they'll forego their own one-day waiver on the excise tax they pay marijuana wholesalers.
A savvy retailer would want to have shelves full enough to supply crowds, but bare enough to take maximum advantage of re-stocking without paying excise taxes before business closes Sept. 16.
Colorado voters will decide in November whether the state can keep the pot taxes it has already collected. The 2013 taxing measure passed 2-to-1, and state politicians seem confident that voters will re-authorize the taxes.
The state constitution requires refunds only in a new tax's first year, so voters won't be asked again.