Why there shouldn't be a high tax on legal marijuana

Last year, Colorado made $109 million in tax revenue from the legalization of weed. That may seem like a lot until you find out that last year's budget totaled at $26.4 billion

Legal Marijuana Sales Totaled $1 Billion in Colorado Last Year - Hit & Run : Reason.com

In addition to not gaining much extra cash to the government, it makes it harder for legal marijuana to compete with its contraband counterpart.

Yes, excessive tax is another driving force for black markets, as we have seen in several jurisdictions with excessive taxes on cigarettes.

I hope Colorado will not be tempted to follow suit.

Thoreau72 said:

Yes, excessive tax is another driving force for black markets, as we have seen in several jurisdictions with excessive taxes on cigarettes.

I hope Colorado will not be tempted to follow suit.

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They can be, but at the same time, even with taxes, you can buy 1/8s of 25-30 bucks even with tax. And end of the day, does someone want to go to a drug dealer or to a store? I think maybe kids in College and stuff may opt for the drug dealer sometimes...maybe, depending on who they know and how much of a pain it is. But for older people or those who don't want the hassle of chasing down their friendly neighborhood drug dealer, it's easier just to go to the store, even when paying the high tax.

Of course, we do need to make sure we don't tax it so much that it becomes pointless and you've encouraged the black market again. But at least for now, there is a lot of worth in it just being legal, so much so that the taxes don't seem all that horrible (though they are extreme). There may come a time when the novelty wears off and they'll need to readjust tax rates to compensate. But for now, the aggregate amount of money one pays isn't too off of "black market" prices, plus it is so much nicer just being able to go to a store.