colorado weed market exceeds tax hopes

yahoo |  Colorado's legal marijuana market is far exceeding tax expectations, according to a budget proposal released Wednesday by Gov. John Hickenlooper that gives the first official estimate of how much the state expects to make from pot taxes.

The proposal outlines plans to spend some $99 million next fiscal year on substance abuse prevention, youth marijuana use prevention and other priorities. The money would come from a statewide 12.9 percent sales tax on recreational pot. Colorado's total pot sales next fiscal year were estimated to be about $610 million.

Retail sales began Jan. 1 in Colorado. Sales have been strong, though exact figures for January sales won't be made public until early next month.

The governor predicted sales and excise taxes next fiscal year would produce some $98 million, well above a $70 million annual estimate given to voters when they approved the pot taxes last year. The governor also includes taxes from medical pot, which are subject only to the statewide 2.9 percent sales tax.

Washington state budget forecasters released a projection Wednesday for that state, where retail sales don't begin for a few months.

Economic forecasters in Olympia predicted that the state's new legal recreational marijuana market will bring nearly $190 million to state coffers over four years starting in mid-2015. Washington state sets budgets biennially.

In Colorado, Hickenlooper's proposal listed six priorities for spending the pot sales taxes.

The spending plan included $45.5 million for youth use prevention, $40.4 million for substance abuse treatment and $12.4 million for public health.

"We view our top priority as creating an environment where negative impacts on children from marijuana legalization are avoided completely," Hickenlooper wrote in a letter to legislative budget writers, which must approve the plan.