Colorado marijuana taxes — Don’t extrapolate

The amount of marijuana tax that Colorado collects for the first month of legalization, to be reported in early March, is unlikely to be a good proxy for a twelfth of a full year’s tax.

For one thing, Colorado’s 15 percent “wholesale” tax will start very slowly in the first few months and then gain steam.  This slow start is due to a “one-time transfer” exception to the wholesale tax:  Product originally owned by a medical marijuana business and then transferred to a recreational business during the startup of legalization will completely avoid the 15-percent wholesale excise tax forever.  Continue reading Colorado marijuana taxes — Don’t extrapolate

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Taxing marijuana potency – Rose Habib

UPDATE September 22, 2014:  Ms. Habib notes: CBDA is an important standard but wasn’t available commercially. It is now available commercially.

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Is THC content is a practical tax base for marijuana concentrates?  I asked Rose Habib.  She was part of the BOTEC team that worked on Washington’s marijuana laws, and is an analytical chemist with Cannabanalysis Laboratories in Montana, http://cannabanalysis.com.

To restate the question, can different labs  measure liquid alcohol extracts and come back with THC results that are very different?

We have a good way to go.  Here’s Ms. Habib’s full answer:

It is true that labs currently could take the same alcohol extract and get different results.  Because of the homogeneity of the sample, we know that this is not because of sample irregularities, we can easily attribute that to lack of analytical accuracy.

In other industries like pharma or supplements or cGMP regulated industries there are validated methods Continue reading Taxing marijuana potency – Rose Habib

Establishment of Religion via Tax Break

If the government wrote a check to every church’s minister, that would be Establishment of Religion, right?  Then what about tax breaks for every minister?  Code section 107 gives tax breaks for housing to any “minister of the gospel” (expanded in Regs to cover rabbis, imams, etc.).  I think that’s the kind of establishment of religion the Founders forbade in the 1st Amendment.

A court agrees.   Continue reading Establishment of Religion via Tax Break

Colorado converts percentage tax base to weight!

Unable to figure out a transfer price for a Constitutionally permitted 15 percent wholesale tax  when vertical integration forbids the existence of a wholesaler, Colorado has substituted a weight based tax.  Wow.

The excise tax is calculated by multiplying the quantity of retail marijuana product by the average market rate at the time, then multiplying by the 15% (excise tax rate). For example: ABC cultivator transfers 3 pounds of flower, 5 pounds of trim and 8 plants to ABC store. At the time of transfer the average market rates are:

$1,876 for Flower Continue reading Colorado converts percentage tax base to weight!