UK

Colorado Has Made A LOT Of Money From Cannabis This Month – Collects $2m Taxes

11/03/2014 10:18 GMT | Updated 11/03/2014 10:59 GMT

The US state of Colorado collected more than a million pounds in taxes from newly legalised recreational marijuana businesses during the first month of sales.

Colorado's licensed dispensaries generated an incredible total of more than $14 million, putting about $2M (£1.2m) of tax revenue into state coffers in the process.

The money will go towards youth prevention services, substance abuse treatment, and public health, according to a plan proposed by Colorado Governor, John Hickenlooper.

Colorado was the first state in the US to licence and tax sales of the drug for recreational use, allowing dozens of shops to open for business on Jan 1, 2014 – to a roaring trade.

Since cannabis use became legal on January 1, Colorado has levied a 12.9% sales tax on all transactions, with medical marijuana taxed at 2.9%.

The state Department of Revenue released the figures on Monday, which showed how much Colorado has taken in from both medical and recreational marijuana taxes and fees.

colorado cannabis

READ MORE: Legalising Cannabis In Britain, Like Uruguay, 'Would Save Millions'

"The first month of sales for recreational marijuana fell in line with expectations," Barbara Brohl, executive director of the department, said in a statement. "We expect clear revenue patterns will emerge by April and plan to incorporate this data into future forecasts."

The figures represent the tax returns from 59 businesses around Colorado, according to the department.

In the lead up to legalisation it was estimated that sales would reach $395million (£237million) in the 2014/2015 financial year.

colorado cannabis

The line stretches around the block on the first day of legal recreational marijuana sales in Denver

Governor John Hickenlooper’s budget office recently dramatically increased it's estimations, announcing that he expects that the combined sales from both legal medical and recreational marijuana in the state will reach nearly $1 billion in the next fiscal year.

But Steve Rolles, the Senior Policy Analyst for the Transform Drug Policy Foundation, told the Huffington Post UK that the initial figures are only so high due to "the novelty factor."

He said the huge media coverage both in Colorado and in neighbouring states has caused a massive sales influx and that "we would expect the market to settle down in time."