John Suthers, Colorado Attorney General, Casts Doubt On Taxes For Legalized Pot

AG Suthers Casts Doubt On Taxes For Legal Weed
|

By Alex Dobuzinskis

Nov 8 (Reuters) - Colorado's Republican attorney general said the state cannot collect taxes of up to 15 percent on pot sales without further voter approval, casting doubt on how quickly a new state measure legalizing recreational marijuana can be implemented.

Colorado Attorney General John Suthers has said that he would implement a voter-approved constitutional amendment legalizing the recreational use of marijuana by adults, although he personally opposed it. But he said the language of the measure conflicts with the state's Taxpayer Bill of Rights.

Washington state and Colorado became the first in the nation to legalize recreational marijuana on Tuesday, putting both states on a possible collision course with the federal government, which says pot remains an illegal narcotic under U.S. law. A similar move to legalize pot in Oregon failed.

But in a blow to backers of Colorado's pot legalization measure, Suthers faulted the pro-pot campaign for telling voters the state would tax pot sales and raise up to $40 million a year for schools.

"In fact, Amendment 64 did not comply with required language under the Taxpayers Bill of Rights and no such tax will be imposed," Suthers said in a statement on Wednesday, citing a 1992 law that bars state officials from raising taxes without a vote of the people.

He said the state legislature would have to approve a tax of up to 15 percent on pot sales and then put that before voters.

The text of Colorado's amendment, which was approved by over 54 percent of state voters, said the legislature would have to impose a special tax of up to 15 percent on the drug.

But Suthers' office said the measure did not contain the precise language called for under the Taxpayer Bill of Rights, which specifies that voters must be asked "Shall ... taxes be increased" a certain amount of dollars per year.

PROPONENTS DO NOT EXPECT PROBLEMS

Both the measures in Washington state and Colorado would allow individuals to have up to an ounce of pot and call on state officials to create a system to regulate and tax cannabis, which would be sold to adults over age 21 at special stores.

Brian Vicente, co-director of the campaign team behind the measure, said he does not anticipate any problems.

"It's just unfathomable that the legislature would not act on this direct mandate from Colorado voters to tax marijuana sales," he said, adding that voters would approve the tax when it comes before them next year, in advance of the first recreational pot stores opening in the state in 2014.

"We would remind the governor as well as Attorney General Suthers that they work for the people of Colorado, not the federal government, so they need to respect the will of the voters," Vicente said.

Eric Brown, a spokesman for Colorado's Democratic Governor John Hickenlooper, said the governor would speak by phone on Friday with U.S. Attorney General Eric Holder about the measure.

Hickenlooper, who also personally opposed the amendment, has pledged to respect the will of the voters.

Colorado House of Representatives speaker designate Mark Ferrandino, a Democrat, said on Thursday the legislature in 2013 would "move forward on the regulatory structure" for pot.

In Washington state, newly elected Attorney General Bob Ferguson, a Democrat who had opposed legalization, said he would also work to uphold the state's new pot laws.

"When the time is appropriate, I will meet with my staff and reach out to interested parties, including federal authorities, to develop a plan to move forward and defend the will of the people," he said in a statement.

The U.S. Justice Department has said in a statement that it is studying the initiatives and had no further comment. Federal authorities have in the past conducted raids at medical marijuana dispensaries in several of the 18 states that allow pot as medicine.

Before You Go

16 Facts About Marijuana And The U.S. Economy
$13.7 Billion Saved On Prohibition Enforcement Costs(01 of16)
Open Image Modal
The government would save an estimated $13.7 billion on prohibition enforcement costs and tax revenue by legalizing marijuana, according to a paper endorsed by 300 economists. (credit:AP)
Marijuana Inmates Cost Prisons $1 Billion A Year(02 of16)
Open Image Modal
Inmates incarcerated on marijuana-related charges cost U.S. prisons $1 billion annually, according to a 2007 study, AlterNet reports. (credit:AP)
Marijuana Prohibition Costs Taxpayers $41.8 Billion A Year(03 of16)
Open Image Modal
Including lost tax revenues, a 2007 study found that enforcing the marijuana prohibition costs tax payers $41.8 billion annually, Forbes reports. (credit:AP)
California Marijuana Crop Worth $14 Billion A Year(04 of16)
Open Image Modal
Marijuana growers account for $14 billion a year in sales in California, making it the state's most valuable cash crop, TIME reports. (credit:AP)
Illegal Marijuana A $36 Billion A Year Industry(05 of16)
Open Image Modal
It's estimated that illegal marijuana is a $36 billion industry in the U.S., MadameNoire reports. (credit:AP)
One-Third Of Americans Think Legalization Would Boost The Economy(06 of16)
Open Image Modal
About one-third of Americans say they think legalizing marijuana would boost the economy, according to a 2010 poll by Associated Press-CNBC. (credit:AP)
Dispensary Ads Boost Newspapers' Revenue(07 of16)
Open Image Modal
The Sacramento News and Review saw a big boost in ad revenue when it offered advertising space for more than 60 medical marijuana dispensaries, enabling the publication to hire three additional employees, according to News 10. (credit:AP)
Mendocino Zip Tie Program Raised $600,000(08 of16)
Open Image Modal
Mendocino County, California's zip tie program aimed at regulating medical marijuana growing by charging permits for each plant raised $600,000 in revenue in for the Sheriff's department in 2011. (credit:AP)
Oakland Raised More Than $1 Million In Marijuana Tax Revenue(09 of16)
Open Image Modal
The city of Oakland, California raised $1.3 million in tax revenue from medical marijuana dispensaries in 2011, 3 percent of the city's total business tax revenue, according to The New York Times. (credit:AP)
Colorado Pulls In $5 Million From Pot Sales Tax(10 of16)
Open Image Modal
In 2011, Colorado pulled in $5 milllion in sales taxes from medical marijuana businesses, The New York Times reports. (credit:AP)
Legal Marijuana Could Be $100 Billion Industry(11 of16)
Open Image Modal
Economist Stephen Easton estimated in 2010 that legal marijuana could be a $45 to $100 billion industry, Bloomberg Businessweek reports. (credit:AP)
Each weGrow Center Creates 75 Jobs(12 of16)
Open Image Modal
When hydroponic marijuana growing supply chain weGrow opens a new store it creates an estimated 75 jobs indirectly, according to AZBusiness Magazine. (credit:AP)
Majority Of States Support Taxing Marijuana(13 of16)
Open Image Modal
More than 60 percent of states agree with taxing marijuana, according to a poll by Associated Press-CNBC. (credit:AP)
Marijuana Affects Workplace Motivation(14 of16)
Open Image Modal
A Norwegian study 25 years in the making came to the shocking conclusion that frequent marijuana use lowers employees' motivation at work.
More Than 1,000 Dispensaries In California(15 of16)
Open Image Modal
There could be more than 1,000 medical marijuana dispensaries operating in California, Pasadena Weekly reported in 2009. (credit:AP)
Denver Counts More Dispensaries Than Starbucks(16 of16)
Open Image Modal
As of July 2011, the city of Denver counted more medical marijuana dispensaries than Starbucks franchises. (credit:AP)