No, Not 420
No, the marijuana holiday we are talking about is not 4/20. Even though 4/20 will always be the most well known marijuana holiday there is, there was a new marijuana holiday that began this Wednesday.
We are sure you have seen many headlines on this new marijuana holiday, but there’s a fair amount of people who haven’t and didn’t understand why it happened. On September 16th, and only on September 16th, Colorado temporarily suspended taxes on cannabis once the state had brought in more tax revenue than expected.
As a result, the marijuana retail stores prepped themselves for crowds of consumers. Retailers saw many consumers line up before stores even opened for the day, just like the beginning of cannabis legalization – except we are guessing that it was not the same amount.
A regular 2.9% sales tax still applied on recreational cannabis and also medical cannabis, but there was still a nice amount of savings for the day on this new marijuana holiday – especially for retailers and growers. This one-day tax suspension had permitted growers “to transfer a month or more of inventory without paying 15 percent excise taxes, or $300 a pound.”
“I probably saved $45,000 before lunch,” said Tim Cullen, owner of the Colorado Harvest Co. chain of marijuana dispensaries.
The Tax Loophole
So why did this happen? We mentioned that the state brought in more tax revenue than expected. Basically, state tax analysts miscalculated overall state revenue for 2014 and it was a quirk in the state’s tax law. Because of this error, the mandatory suspension of the new marijuana taxes began, and thus a new marijuana holiday was born. Will it come again? There’s always a possibility, but it was simply a loophole.
“I saw online there was some kind of loophole on the taxes, so I had to come buy some,” said David Illig of Onawa, Iowa, who was driving through Colorado for the day.
There was actually an estimate that a one-day suspension would cost the state between $3 million and $4 million in lost taxes. That’s unbelievable. However, state marijuana regulators declined to give an estimate on how much was lost on Wednesday.
What we do know is that retailers, growers, and consumers alike enjoyed the new marijuana holiday more than anything and were thankful that the day came, even if it was just for a day. Even Snoop Dogg sent a special message to Colorado documenting and acknowledging their progress and also the special one-day marijuana holiday.
If you’re a Colorado resident and saying “damn, I wish I knew about this, why didn’t anyone tell me?” We’re sorry.
(Photos courtesy of BBC and NY Times)