Comment · Thu, November 7, 2013
Colorado voters approve 25 percent taxes on recreational marijuana
What they were answering
PutItOnaTshirt · 1 points
yeah but I think when you get right down to it, its just a weed. I mean it isn't totally far-fetched to think that in about 5 years of success the price for an ounce of quality cannabis could be about $35. You could add a ridiculous sin tax of $100 per ounce and it would still be cheaper than the current street or medical dispensary prices.
u/MisterYouAreSoDumb
I think the per-unit cost could actually fall lower than that. However, taxes are looked at on a percentage basis, not an opportunity cost basis; since there is no legal alternative to the tax. The reason moonshining is not widespread, is that alcohol taxes are reasonable in most places. In places where the regulation is stricter, you see it much more often. If they were to put a 25% tax on alcohol, you can be sure illegal brewing and distilling operations would become more commonplace. The players in the marijuana market are already used to skirting the law. So it would be even easier for them to just continue it and undercut the market. Then you open up opportunities for cartels/gangs to continue making margins.
So this is the first widespread implementation of recreational legalization. There is going to be a lot to learn, and I think they will eventually lower the tax rate as more states enact similar laws.