Colorado marijuana consumers were taking advantage of a quirk in state law that led to the suspension of most taxes,including the 10% sales tax,on recreational pot for one day on Wednesday.
According to a report in the Guardian, because Colorado underestimated the amount it would make from legal marijuana, the state constitution automatically called for a mandatory tax suspension, which was limited to one day. Wednesday’s break came a day after Colorado finalized its fiscal year accounting – the first full fiscal year in which those over 21 could legally buy both marijuana and alcohol.
“The cannabis community has brought so much money to the state of Colorado, this is only fair,” said Chad Drew, sales manager at Colorado Harvest Co, in an article published by ABC News.
Out-of-state visitors also enjoyed weed’s tax-free holiday. “I saw online there was some kind of loophole on the taxes, so I had to come buy some,” said David Illig of Onawa, Iowa, toABC, while several marijuana retailers also said the day had a business volume similar to a busy holiday weekend.
When compared to the other tax classes, marijuana, which brought in $70 million, trumped alcohol-generated taxes, which amounted to $42 million, according to the Guardian.
Despite the larger-than-expected tax collection from marijuana, one University of Colorado-Denver economist who has studied marijuana’s legalization said the Colorado numbers are not very revealing, stated the Guardian.
“I wouldn’t read too much into one state’s experience,” economist Daniel Rees was quoted in the article.