Vail Valley pot tax projections up in the air, state projections stay steady
EAGLE COUNTY — When the numbers are run, Eagle County will collect around $200,000 from the state and another $355,000 from local marijuana retail sales in 2018, according to Eagle County’s finance department.
The county’s 2019 budget projections forecast that state marijuana revenue for 2019 will stay level at around $200,000. Local sales taxes, however, are more cautiously optimistic.
Marijuana and mental health
Eagle County voters were among the first in Colorado to approve a pot tax targeted for mental health programs. That’s where the $355,000 came from, explained Jill Klosterman, Eagle County’s finance director.
Because Eagle County’s pot tax wrapped up its first year with the end of 2018, it’s too soon to project trends. But, so far so good, Klosterman said.
Like Colorado’s school funding formula, marijuana sales taxes are collected by the state and distributed to counties. In Eagle County’s case, that’s $200,000. Eagle County’s budget projects the county will get another $200,000 in 2019.
Klosterman said the county is happy to have the extra $200,000 in pot taxes, but it doesn’t make much of a dent in the county coffers.
In 2017, general retail poured in the most sales tax revenue ($3.9 million), ahead of restaurants and breweries ($2.9 million).
Like everything else in the Central Rockies Resort region, cannabis sales are seasonal. The most sales taxes were collected in March, according to data from Eagle County’s finance department.
Colorado Department of Revenue data paralleled the local stats. Statewide marijuana sales tend to peak at the heights of the summer and winter tourist seasons, and slide in the spring and fall. Colorado dispensaries sold $24 million in cannabis products in July 2017. That dropped to $23 million in July 2018.
Statewide through October, marijuana, medical and retail pot saw $1.28 billion in sales from January through October, edging out the $1.25 billion in sales for the same time period in 2017, according to the Colorado Department of Revenue.
Since Amendment 64 became Colorado law, legalized retail marijuana has generated $5.78 billion in both retail and medical cannabis sales, based on figures from the state revenue department.
Statewide, sales of marijuana and other cannabis products generate around $250 million a year, according to Colorado’s Department of Revenue.
Like any agricultural commodity, prices tend to fluctuate, said staffers with local dispensaries through Eagle-Vail’s “Green Mile” — a stretch of U.S. Highway 6 with multiple dispensaries. They were happy to provide information but said they’d rather remain anonymous.
Wholesale prices plummeted through the summer and bounced back through the fall and early winter.
Dispensaries buy it by the pound from in-state growers, they explained, and those growers can charge up to $1,600 per pound. Their average is about $1,100 per pound, dispensary staffers said.
At a tax rate of 19.5 percent, Green Mile retailers still pay less in sales taxes than some other areas of the state, even with the mental health levy Eagle County voters approved on marijuana sales.
Green Mile staffers said some of their Front Range stores pay between 25 and 28 percent in sales taxes.
Pitkin pot market
Marijuana sales are also robust in Pitkin County, where marijuana sales temporarily surpassed liquor sales. The cannabis industry is a business and the same principles apply, Alex Levine, the co-owner of the Denver-based Green Dragon chain told The Aspen Times. Green Dragon has 12 shops in Colorado, including one on the Hyman Avenue mall.
Like Eagle-Vail’s Green Mile, Aspen’s marijuana market outlets are relatively concentrated with seven dispensaries and an eighth set to open early this year.
Levine says that means the market is artificially inflated.
“Everybody thinks they can open a shop, and it’s a ticket to print money,” Levine said. “It’s very hard to run a comfortably profitable business by entering the industry without a game plan.”
Staff Writer Randy Wyrick can be reached at 970-748-2935 and firstname.lastname@example.org.
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