The tax cut, from 10% to 8%, will go into effect in early 2017. Proponents of the move believe it will lower the price of cannabis which will help the legal cannabis market compete with the black-market.
The proposal also establishes a one day cannabis tax break, or what some call a tax holiday. On September 16th of this year, cannabis sales won’t be subject to the state’s 10% sales tax. This is due to what Governor Hickenlooper, who is publicly opposed to legalization, calls a “fiscal glitch” with the constitutional.
In addition, the measure places an initiative on this year’s ballot asking voters to allow the state’s legislature to keep all of the taxes earned from cannabis sales, rather than have it refunded to citizens in the state.
According to data released by state officials, there was $700 million worth of legal cannabis sold in Colorado in 2014, resulting in $76 million in taxes for the state.