Calculating Colorado marijuana sales

My mistake:  I thought I could figure out the ratio of recreational marijuana sales to medical marijuana sales in Colorado (and gross sales) by comparing sales tax figures.  Both bear the same 2.9 percent sales tax, so I took sales taxes reported by recreational businesses and divided by .029 to get total recreational sales.  Then I did the same for medical marijuana businesses (which report separately in Colorado).

Not so fast!  Professional journalists got this right.  It turns out that those sales taxes cover not just marijuana, but everything sold in the stores – pipes, papers, T-shirts, trinkets, you name it.  (Thanks to Natriece Bryant of the Colorado Department of Revenue for confirming that treatment.)

It’s easy to calculate sales of recreational marijuana:  take the 10-percent retail tax reported by the State, and multiply it by 10 (divide it by .10).  (I thought my 2.9 percent method was close enough, and had the advantage of comparing recreational and medical marijuana sales directly.)

Getting it right alerted me to a phenomenon:  In January, only 2.5 percent of sales of recreational marijuana stores were accounted for by non-marijuana items (pipes and so on).   By May, that figure had risen to 6.5 percent.

Here are the figures:

first month sales taxes $416,690.00
divided by.029 sales tax rate $14,368,620.69
10-percent taxes divided by.10 percent retail tax rate $14,015,680.00
difference $352,940.69
percentage 0.024563296
fifth month sales taxes $642,124
divided by.029 sales tax rate $22,142,206.90
10-percent taxes divided by.10 percent retail tax rate $20,705,770.00
difference $1,436,436.90
percentage 0.064873249

If links above don’t work, try http://www.colorado.gov/cs/Satellite/Revenue-Main/XRM/1251633259746

So are businesses playing the game of bundling?  Are they tossing in “free” marijuana with sales of stuff that does not bear the 10-percent tax?  I have no idea.

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