Legislators take it slow on marijuana spending

DENVER – Legislators proceeded cautiously Tuesday when deciding how to spend marijuana tax money, the state’s biggest and most volatile new source of revenue.

Gov. John Hickenlooper has asked for $54 million in spending from marijuana taxes in order to fund law enforcement, anti-drug programs and health care for substance abusers.

But the Joint Budget Committee wants to wait to spend marijuana taxes the year after they are collected. That would leave the state with just $20 million to spend in the budget year that starts in July.

“If we don’t do this from the onset, we’re going to miss the opportunity to do this right,” said Sen. Pat Steadman, D-Denver.

The Legislature waits a year until it spends money from gambling taxes, and Rep. Cheri Gerou, R-Evergreen, said normally she would agree with that approach. But she worried that it could hurt efforts to keep young people from using marijuana.

“What kind of public health risk are we providing for our kids?” Gerou said.

Gerou ultimately went along with the plan to wait a year. The budget committee will talk again Thursday about how to spend the money, and the full Legislature will have a say in the next few weeks.

Hickenlooper has big plans for the money, including hiring more school resource officers, creating a registry of people arrested for driving while high, adding money for delinquency-prevention programs and boosting the budget for drug treatment. All those ideas could have a to wait a year if the Legislature decides to play it safe with its pot tax money.

Marijuana taxes are flowing in slower than the state’s analysts had predicted. The numbers for February – the second month that over-the-counter sales of recreational pot were legal – came in Tuesday, and they showed an increase over January.

But the slow pace of local licensing of stores meant that 83 shops were open in January, fewer than the 110 that were predicted. The state charges a 12.9 percent sales tax on non-medical marijuana, which brought in about $2.2 million in February.

Medical marijuana sales increased dramatically, in spite of predictions that many medical users would migrate into the recreational market.

The tax on medical marijuana is much lower, 2.9 percent, and it brought in an additional $1 million to the state.

Together with license fees, taxes on both classes of pot totaled $4.1 million in February.

The Legislature will wrap up its work on the overall state budget this week, but with the marijuana money, legislators are effectively doing a miniature second budget, with at least $20 million that has not been available before.

Steadman predicted “an incredible feeding frenzy of lobbying.”