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Colorado increases weed tax from 10% to 15%

Do you think there will be an impact on sales with the increased tax for recreational cannabis? Or will the market be able to absorb this increase without a problem?

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That is a huge jump.

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It is a huge jump, for sure, but I think the tourists won’t care one bit because they’re just excited that it’s legal and they can come buy it in CO.

For the locals, I think it’ll push more folks towards medical licenses. Medical is already cheaper on pre-tax dollars and post-tax dollars, so this additional tax only increases that gap in pricing.


I don’t mind the jump so much as a Colorado resident, since the taxes are going to good use. I’m just happy to be in a legal state. If my consumption level was very high, for a medical condition for example, then I’d probably get my medical card.

It is best to keep in mind that this is basically increasing the total tax rate from about 21% to about 26% in Denver (other counties vary slightly). There is almost 15% excise tax built into the price, so you’re looking at over 41% tax on cannabis before it’s in a customer’s hands.

Budget problems aside, the people of Colorado didn’t vote for cannabis taxes to be used in this fashion. The state actually removed cannabis from the TABOR calculations. I’m not a fan of TABOR, but I think it needs to be applied across the board or not at all.

This increase will drive a few people back to the medical system and a few people to the black market. How many people? That’s hard to say. Most estimates of the price elasticity of cannabis are -0.6 (for low quality) and -0.3 (for high quality). You can extrapolate out from that the decrease in sales a 5% tax increase will cause.


My question is, do you think the increased taxes will drive “cannabis tourists” to other states? With California coming online in the near future, cannabis tourism may die down in CO with higher taxes.

Agreed. Though in CO there are so many tourists, most of which have nothing to do with cannabis, that the dent on cannatourism probably won’t even be notable in the tourism statistics.


Agreed - the people who come here for a visit are just so excited to visit a legal dispensary in my experience. They tend to buy way more than they can consume during their visit. When my friends come to visit I end up benefiting from the leftovers they have to leave behind :slight_smile:

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No, I don’t think this tax increase will drive tourists to other states. Very soon there will be cannabis everywhere and it won’t be too much of a consideration for tourists.