Colorado Passes Proposition AA Tax Measure

On November 5, Colorado passed Prop AA, a measure that outlines the specific taxes to be imposed on the sale of recreational marijuana. The measure works in conjunction with Amendment 64, the ballot measure passed last year that taxes and regulates marijuana for adult use. Prop AA is an important step to establish taxes to fund the regulation of the marijuana industry.  Although Colorado has ended their prohibition of marijuana, it is still illegal under federal law. The DOJ announced in July that it will not interfere in Colorado’s implementation of a regulated marijuana industry, but only if it adheres to the regulations set out in Amendment 64 with a fully-funded regulatory body, among other criteria.

In order to pay for regulation and oversight, Prop AA establishes a 15% excise tax imposed on the sale of marijuana from a cultivation facility and a 10% sales tax imposed when a consumer purchases marijuana from a retail store. This tax revenue will allow the state to monitor marijuana sales and implement the regulations set out in Amendment 64. The revenue will also go toward the Building Excellent Schools Today program, which will improve infrastructure, technology, and construction of new facilities for Colorado Public Schools.