Colorado’s Cannabis Tax Revenue for Public Education

It is an ironic twist that seems appropriate for the marijuana business. Taxes collected from the retail sale of marijuana will be used to educate teens in Colorado about the dangers of drug use. When Colorado legalized marijuana, the state built in provisions to fund programs and staff to help improve the health of local students.

Colorado has already awarded the first payment on that promise by giving nearly $1 million worth of grants to schools throughout the state, according to The Denver Post. As the tax revenue collected from the sale of legalized marijuana is put to use in these public programs, many are aimed at preventing, treating and regulating marijuana use. The Denver Post also reported that the plan calls for hiring school nurses, social workers, and psychologists to help prevent and treat substance abuse among students.

Vice News reported that 11 school districts that applied for grants are dividing up the first $1 million in funding from marijuana tax revenues. The state promises another $1.5 million to future applicants. To use the rest of the funds, the state opened a second application period, which closed last week. Much of the revenue is being distributed to substance abuse treatment programs, school construction, and training and equipment for law enforcement agencies to deal with marijuana-specific problems. Driving under the influence of marijuana, according to a bill passed by the legislature earlier this year, is considered to be a unique new issue and is part of the covered programs.

State Sen. Pat Steadman, one of the bill’s sponsors, was the architect of the  revenue for education plan. It isn’t hard to see the connection between other smokeables and a state’s conscience. Most states collect millions of dollars annually from tobacco companies who fund prevention and treatment programs. Vice reported that in 1998, the country’s biggest tobacco companies agreed to pay more than $200 billion to state governments in a lawsuit settlement due to the healthcare costs of smokers. The money, to be paid out over 25 years, was specifically designated to be used for prevention and treatment programs.

The tax is collected in a unique structure. Canna Law Blog breaks it down as follows:

“In Colorado, retail consumers pay the state sales tax of 2.9% plus any local sales taxes plus an additional 10% state marijuana sales tax. However, retail consumers are still absorbing a 15% Retail Marijuana Excise Tax. Colorado imposes a 15% excise tax on the first sale from the cultivator to the retail manufacturing facility, retail store or another cultivator facility. The cultivator is liable for the tax. However, the retail marijuana store will include this excise tax in its consumer sale price similar to liquor or tobacco.”

On November 12, 2014, Colorado’s state board of education approved the following 11 grant awards:

Alamosa School District, $50,000

Archuleta School District No. 50 JT, $65,790

Center Consolidated Schools 26JT, $87,062

The New America School, $169,232

Atlas Preparatory School, $89,200

Cripple Creek School District, $108,024

HOPE Online Learning Academy, $131,900

GOAL Academy, $53,440

Mountain Valley School District RE-1, $64,000

South Routt School District RE-3, $60,360

St. Vrain Valley School District, $96,650


Details and a county-by-county breakdown provided by the Colorado Department of Revenue.

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