No state has ever generated more tax revenue from marijuana than alcohol—until now.
The Colorado Department of Revenue, according to recently released figures, just brought in $70 million in taxes relating to marijuana, compared to less than $42 million for alcohol taxes, over the course of a year.
This Wednesday, Colorado is declaring a marijuana tax holiday, meaning that for a single day, taxes on marijuana items will be suspended.
“Marijuana taxes have been incredibly productive over the past year, so this tax holiday is a much-deserved day off,” Mason Tvert, director of communications for the Marijuana Policy Project, said in a statement. “This will be the one day out of the year when the state won’t generate significant revenue. Over the other 364 days, it will bring in tens of millions of dollars that will be reinvested in our state.”
The total amount Colorado raised in tax revenue during fiscal year 2014 to 2015 was $69,898,059.
Part of the reason why marijuana has completely outpaced alcohol in bringing in revenue is that marijuana users spend much more on the drug than Americans spend on alcohol or tobacco. According to new market research from Marijuana Business Daily, the average amount spent on marijuana in states where the drug is legal is $1,800 per year. Alcohol spending is pegged at only $450 and tobacco at $315, representing a major gap. Americans on average only spend about $602 on personal care products and services, almost a third of what’s spent on marijuana.
The majority of cannabis users use the drug daily. A total of 82 percent of medical users partake daily, compared to 57 percent of recreational users.
“It’s crazy how much revenue our state used to flush down the drain by forcing marijuana sales into the underground market,” Tvert said. “It’s even crazier that so many states are still doing it. Tax revenue is just one of many good reasons to replace marijuana prohibition with a system of regulation.”