Colorado Legislative Committee Votes To Reject Bill To Put Marijuana And Alcohol Tax Hikes On November Ballot

A Colorado legislative committee is urging fellow lawmakers to reject a
bill that would put a measure on the state’s November ballot asking voters
to increase marijuana and alcohol taxes to support mental health treatment.

At a meeting on Thursday, the bicameral Capital Development Committee (CDC)
took up the proposal from Rep. Bob Marshall (D) and Sen. Judy Amabile (D)
that aims to hike taxes on the substances and put the additional revenue
toward the creation of a mental health fund overseen by the state
Department of Human Services (DHS).

Members of the panel voted unanimously (5-0) to send a letter to the House
Health and Human Services Committee recommending that the panel reject the
legislation, HB 1301, when it’s taken up at a hearing scheduled for
Wednesday.

If the bill is passed by the legislature, voters across the state would
then decide on increasing the state retail marijuana sales and excise taxes
by 0.42 percentage points each at the ballot this coming November. Alcohol
taxes by volume would also increase for the first time in more than 30
years, by varying levels depending on the product type.

“The bill requires the treasurer to transfer an amount equal to the tax
revenue raised as a result of the bill to the hospital support account that
is created in the capital construction fund,” a summary of the measure
says. DHS would be able to expend the funds in “priority order,” starting
with the creation of a mental health institute in Aurora, then going toward
operational costs for the institute and “long-term civil commitment
facilities” in Mesa County.

During last week’s CDC meeting, Rep. Tammy Story (D), vice chair of the
panel, asked House bill sponsor Marshall how he squares the proposal to
hike marijuana taxes with the fact that the state has seen cannabis sales
and resulting revenue slump over recent years.

“We kind of threw marijuana in to spread the pain, so to speak,” Marshall
conceded, adding that if there were additional “harmful substances” to tax
at a higher rate, they could theoretically “drop marijuana” from the
equation.

“I’m a big believer in sin taxes, but the tax should go to ameliorate the
issues and externalities of the sin,” he said. “So at least the way I
justify this in my mind is, if you talk to a lot of mental health people,
so many of the seriously mentally ill self-medicate with alcohol or
marijuana. That’s how I’m able to justify taxing marijuana and alcohol for
an excise tax.”

“If we need to back off on marijuana, that’s fine,” he said, “but then the
alcohol would have to take a larger load of the tax, or we find something
else.”

Marijuana industry representatives have criticized the bill’s marijuana tax
provisions, in part by pointing out that the state already imposes
significant taxes on cannabis sales compared to other states and
commodities. Making it more expensive for consumers to purchase marijuana
for licensed retailers could also undermine efforts to eliminate the
illicit market, drawing buyers back to unlicensed sources where no tax
dollars would be generated for the state.

While the state has seen over $1 billion in marijuana sales in 2025—a
milestone the governor touted in December—tax revenue from cannabis sales
has gradually decreased over the past five years as more states have
enacted legalization and as intoxicating hemp products have grown in
popularity. Nonetheless, cannabis is still bringing in more tax dollars
compared to alcohol or cigarettes.

Adult-use marijuana is currently taxed at three levels in Colorado: A 15
percent excise tax, 15 percent special sales tax and 2.9 percent state
general sales tax. As one of the first states to legalize marijuana for
recreational use, Colorado saw revenue from those sales grow “consistently
for the first eight years of legalization, peaking at $424.4 million FY
2020-21,” a report from the state that was released last month says.


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Meanwhile, the Colorado House of Representatives last week sent a bill to
the governor that would allow terminally ill patients to use medical
marijuana in healthcare facilities such as hospitals. Advocates have been
critical about changes made throughout the legislative process—arguing, for
example, that making it so hospitals would have the *option*—rather than a
*mandate*—to allow medical cannabis use in their facilities fundamentally
undermines the intent of the reform.

Gov. Jared Polis (D) also said last month that his state should not have
joined a lawsuit supporting the federal ban on gun ownership by people who
use marijuana that recently went before the U.S. Supreme Court—and he
personally opposes the state attorney general’s “legal position on this.”

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Marijuana And Alcohol Tax Hikes On November Ballot appeared first on Marijuana
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