Marijuana is getting cheaper. For a few countries and Colorado, that's a problem

Marijuana is getting cheaper. For Colorado and some states, that's a problem

Bud prices in Colorado have dropped by a third in the past 12 months, continuing. States will feel the bigger financial hit which tax marijuana based on its price, Though this implies that some marijuana entrepreneurs are going to go bankrupt.

Marijuana prices are collapsing in Colorado and in other legalization states (e.g., Oregon, where the price can go as low as $100 per pound) as a legal company is dramatically cheaper to run than an illegal one. Their revenue per sale sinks to the fall in marijuana rates in proportion because states set their marijuana tax rates as a percentage of price. In a bid for greater tax revenue per marijuana sale, its marijuana tax rate increased to 15 percent from 10 percent this past year, only to see the added tax revenue by falling prices per year ’ s time wiped out.

States may have failed to anticipate this problem due to predictions . Pro-legalization economist Jeffrey Miron projected that marijuana prices would fall 50 percent when prohibition was repealed, leaving the drug at a price that would yield high tax revenue. That was a rosy scenario.

Read the rest of this story on DenverPost.com.

Published at Wed, 21 Nov 2018 22:34:57 +0000

Posted in: News

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