Does cannabis cost or pay? Study claims marijuana costs $4.50 for every $1 it generates

Randy Wyrick / Vail Daily
Coloradans spend $4.50 for every $1 they collect in marijuana taxes, according to Colorado Christian University's Centennial Institute, although others in the industry question the study.
Associated Press

Coloradans spend $4.57 to mitigate marijuana’s effects for every tax dollar it generates, claims a recently released study.

Colorado Christian University’s Centennial Institute scoured 2017 data to try to understand the economic and social costs of legal marijuana, said Jeff Hunt, CCU’s vice president of public policy and director of the Centennial Institute.

“No matter where you stand in the marijuana legalization debate, having more information is critical to making the best decisions for the future of Colorado and our nation,” Hunt said in a statement.

The tab taxpayers pick up will likely increase as commercial marijuana’s long-term health consequences become more clear, Hunt said.

“Like tobacco, commercial marijuana is likely to have health consequences that we won’t be able to determine for decades,” Hunt said, adding that those costs are not configured in the report. “The economic and social costs in this report are intentionally low and the comprehensive costs are likely much higher.”


The Marijuana Industry Group takes a different view, said Kristi Kelly, executive director of the Colorado-based industry group.

“We’re always going to have different interpretations of the data,” Kelly said.

The Marijuana Industry Group is fond of state statistics, instead of mining its own data.

Coloradans say opioids, not marijuana, is the state’s top health issue, Kelly said.

In fact, the state just awarded $1.5 million to study the impacts of marijuana on opioid addiction.

“We’re talking about a product, cannabis, that has shown indicators that it can be helpful in battling the state’s No. 1 health problem,” Kelly said. “Why are we focusing our time and energy on a possible prohibition instead of focusing on what the state says it needs. Imagine how much more quickly we could address these issues if we worked together.”

The National Cannabis Industry Association takes an even more jaundiced view of the Centennial Institute’s study. For example, the Centennial Institute’s study attempts to connect legal marijuana with low birth weights, Morgan Fox, National Cannabis Industry Association media relations director said.

“There is no causal relationship shown between marijuana legalization and most of the costs they mention,” Fox said. “Blaming all low-birth-weight babies on marijuana legalization and lumping those costs into the total is ridiculous.”

Fox said lawmakers and state regulators, as well as independent oversight groups, have access to the same data.

“Yet this vehemently anti-marijuana group is the only one that seems to have arrived at the conclusions in this study,” Fox said. “I don’t think this report is very scientifically rigorous and would like to see it be peer-reviewed. I’m guessing it would not pass muster, aside from being clearly biased.”


Since recreational marijuana became legal in 2014, it has generated $641,978,779 in tax revenue for the state, about 1.8 percent of Colorado’s tax revenues, according to the Colorado Department of Revenue.

Marijuana sales taxes surpassed alcohol in 2014, and cigarettes and tobacco products by $47 million in 2017, according to the Colorado Department of Revenue.

Those marijuana sales taxes are generated by 3,065 facilities with marijuana licenses: 1,459 medical marijuana licenses and 1,606 recreational marijuana licenses, according to the Colorado Department of Revenue.

Eagle County voters earmarked a marijuana tax for mental health facilities and programs, the first in Colorado to do it.

That tax money may be tougher to come by with wholesale prices continuing to drop, from $2,007 per pound on Jan. 1, 2015, to $846 in July of this year, according to the Colorado Department of Revenue.

Despite that price drop, Colorado dispensaries sold more than $233 million of marijuana products through October of this year, close to the $247 million through all of 2017.


Colorado Gov. John Hickenlooper was against legalizing marijuana as the state’s voters considered it in 2012. Over the years, his perspective has shifted, he told the Economic Club of Chicago.

“The things we most feared — a peak in teenage consumption, a peak in overall consumption, people driving while high — we haven’t seen,” Hickenlooper told the Chicago Tribune. “I’m not quite there to say this is a great success, but the old system was awful.”

Legal weed does not appear to have created a Colorado crime wave, but both legal weed and the data are new, according to a state report.

The Colorado Division of Criminal Justice Office of Research and Statistics released Impacts of Marijuana Legalization in Colorado, a report that analyzes data on marijuana-related topics including crime, impaired driving, hospitalizations and emergency room visits, usage rates, effects on youth and more.

State lawmakers ordered the study in 2013 after Colorado voters passed Amendment 64, which legalized the retail sale and possession of recreational marijuana for adults older than 21.

A Rocky Mountain regional drug enforcement task force analyzed data from 2003 to this year and found that 43 percent of drivers in fatal accidents had drugs in their systems, and 36 percent of drivers in fatal accidents had marijuana in their systems, according to the Rocky Mountain High Intensity Drug Trafficking Area.

That’s compared to 37 percent of drivers in fatalities whose blood alcohol levels were above the legal limit.

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