Colorado’s marijuana tax revenue is on pace to severely miss the mark. In February of last year, the office of Governor John Hickenlooper predicted that the legalization of weed would bring in $118 million, but now the projection has plummeted to $69 million. That represents a 42 percent decrease, reported the New York Times.
The fiscal benefit of changing marijuana policies has been the driving force behind its legalization throughout the country. Lower than expected recreational marijuana sales is a big reason tax revenue is expected to fall short. Colorado officials expected a greater migration of medical marijuana users to the recreational market, but higher taxes on non-medical marijuana discourages buyers to switch.
On top of that, much of the market is still unregulated. Home growing, trafficking and black market production have diminished legal sales of weed in the state. Not to mention that as more and more suppliers saturate the market and scale up, the price of pot will inevitably fall and as a result, estimations based on pre-legalization weed prices won’t be accurate, reported the Times.
