by David Ramsey
Governor John Hickenlooper had initially estimated there would be $70 million in tax revenues during the first full year of legal pot. But in February, he provided a more optimistic outlook, saying total revenues for the first full year would be $98 million, a roughly 40 percent increase. He also said in February that revenues for the first fiscal year, starting in July, would top out $134 million, though he has since dialed down those expectations back, by around $20 million.
That kind of acceleration might sound like some drug-addled math, considering that Colorado had only $7.5 million in revenues during the two months combined. But according to Moody's, the first two months' worth of weed tax hauls "likely significantly understate long-term revenue potential." That's because the state's full pot economy hadn't even yet grown to its full potential. New retailers have continued to open, growing cultivation has boosted supply, and more licenses have been issued, meaning many more opportunities to sell bud.
All of that pot-smoking is great for Colorado's kids, as it turns out. Of the pot revenue spending that is authorized, the lion's share, $40 million, is for public schools. But the additional, unexpected revenues have yet to be allocated. Hickenlooper has proposed spending that new money largely on substance abuse treatment and prevention, as well as law enforcement.
I think there might have been a burst of feeling that what happened in Washington and Colorado was going to be soon replicated across the country. I'm not sure that is necessarily the case. I think a lot of states are going to be looking to see what happens in Washington, what happens in Colorado before those decisions are made in substantial parts of the country.