Last week marijuana users in Colorado experienced a statewide sales tax holiday, a “reset” of the state’s cannabis taxes that will keep the tax code in line with the state’s constitution. Shops all over Colorado had been planning for the event for a while, several months in some cases.
During the tax holiday, the state’s 10% sales tax on marijuana purchases was waived, and many businesses slashed prices on top of that, ensuring a massive stream of customers all day. Supply had no trouble with keeping up with the demand the day created since growers were able to take advantage of not paying the 15% tax they pay when they sell to cannabis shops.
The holiday itself cost the state almost $4 million, which shows you just how much tax revenue weed generates. It also shows you how much price affects sales. It seems like common sense, but some don’t seem to grasp how much lower legal prices hurt the black market. There were a lot of bored drug dealers in Colorado that day.
A rather amusing editorial in the Colorado Springs Gazette on the tax holiday had a different take on the day.
“For advocates of marijuana anarchy, holidays don’t get better than this,” the editorial said, “a sudden drug surplus stands to burden employers, law enforcement, schools, hospitals and responsible parents. It will undoubtedly make pot more available to kids, who can lose 8 IQ points with regular use. That’s neither magical nor funny. It is tragic.”
The monumental stupidity of this paragraph is evident, including the fact that the “lose 8 IQ points” study that is often cited has been challenged by others and the assertion that “it will undoubtedly make pot more available to kids” is backed by no empirical evidence whatsoever. As cannabis activists often point out, drug dealers don’t check ID. But licensed cannabis shops have every reason to check ID.