Marijuana cultivation operations throughout Colorado saved tens of thousands of dollars Wednesday as they seized a tax holiday that freed them of duties charged when pot is moved from a cultivation center to a shop.
“My space will all be empty today,” said Daniel Morgan, grow operator for the Starbuds chain, as he stood before a 30-pound mound of pot in a north Denver warehouse. “We’re just sending it to all the stores.”
Morgan said he hoped to move up to 100 pounds of marijuana by the end of Wednesday, which would mean $30,000 in savings.
The holiday is the result of Colorado’s complex Taxpayer’s Bill of Rights and could ultimately cost the state $3 million to $4 million in revenue. The holiday waived the 10 percent retail tax on customers and the 15 percent excise fee charged when pot is moved from a cultivation center to a shop.
It did not waive duties on medical marijuana or local taxes.
Shout-out from Snoop
The holiday stems from a rule that dictates when overall tax collections in a year have exceeded projections, Colorado must ask voters for permission to keep the money. To comply with the requirement taxes revert to zero, lawmakers settled on a one-day tax waiver.
Colorado’s Marijuana Enforcement Division says pot-specific state taxes generated roughly $65 million for fiscal year 2014-15, which ended in June, while alcohol-specific taxes generated about $42 million over the same period.
“Marijuana taxes have been incredibly productive over the past year, so this tax holiday is a much-deserved day off,” Mason Tvert, spokesman for the Marijuana Policy Project, said in a statement.
Some retailers offered additional deals, hoping to capitalize on the day.
“They’ve been setting up doing their advertisements and telling their customers to come on down for special deals,” said Tyler Henson, president of the Colorado Cannabis Chamber of Commerce.
Managers and owners said that although they did not see the huge crowds they were hoping for, there was definitely an influx.
“A lot of people are coming in and (talking) about the discount,” said Juan Somera, manager of Denver’s Discreet Dispensary. “They say, ‘I’m here for my 10 percent!’ “
Colorado marijuana tax
Sean Walker was among roughly two dozen people who arrived at Sweet Leaf in Aurora for an early-morning purchase.
“Might as well jump on it while it’s available,” he said.
Cultivators bulked up pounds of their supply during the past several weeks so they could save thousands of dollars foregoing excise fees. Many say they walked a fine line between stocking store shelves and preparing for the holiday.
“Normally, that 15 percent tax comes to roughly $300 per pound,” said Brian Ruden, who owns the Denver-area Starbuds chain.
Grow operations stockpiling pot led to a shortage in wholesale product availability, industry members say.
Even Snoop Dogg recognized the tax break in a video addressed to Colorado.
“In honor of it being an incredible year for the movement, I would like to wish you a happy tax holiday,” Snoop, the rap mogul, says in the video. “I love seeing the positive impact of the cannabis business in your beautiful state.”
The Associated Press and staff photographer Steve Nehf contributed to this report.