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Legal Marijuana in Colorado: What’s It Cost To Get Stoned?

Marijuana plantWelcome back loyal Eyes on the Dollar readers. I certainly enjoyed my time off. Now that it’s a new year, gifts have all been given,  the decorations are put away, and I can go buy some weed if I want. As of January 1st, the sale of marijuana for recreational use is legal in Colorado. Even in my younger days, I was never a pot smoker, so I have no intention of stocking up, but if you were in need of some wacky tobacky, how much does legal marijuana cost in Colorado?

Supply vs Demand

Just like with any other consumer product, so far, it seems that the cost of marijuana is following the law of supply vs demand. According to nbcnews.com, the state of Colorado has approved 348 licenses for retail pot sale. However, only about 3 dozen establishments have opened. It seems that the state is more than eager to get the tax dollars from all this legal weed, but local municipalities are not quite as excited. The state license means nothing if the local governments don’t want their downtowns  to become full of herb shops.

As a result, the prices have been fluctuating since opening day. In Denver, top line weed was selling at $70 for an eight of an ounce at one dispensary. Just like at Costco, if you buy in bulk, you can save $$$ with an ounce going for $300-$400. These prices are also pre-tax.  Residents of Colorado are able to buy up to an ounce at a time, while out of staters are limited to a quarter ounce.

How Much Will the Tax Be?

The state hasn’t decided how much the final tax on legal marijuana will be, but 25% seems likely. They don’t want it priced so high that buyers will purchase on the black market, but I’m sure they want to milk as much revenue out of pot sales as possible. The impact of marijuana sales on the state’s piggy bank should start to become apparent in about a month. I also think as more stores open, the price will come down. Currently, people with a medical card can purchase marijuana for about $250 per ounce, so I don’t expect that recreational users will be paying much more than this.

Cost of Weed vs Other Vices

I have no idea how long an ounce of marijuana would last someone. I guess, like with any vice, it depends on how much you use. Whether it’s booze, cigarettes, gambling, overeating, or legal weed, you can certainly spend lots of money to keep up a habit. I imagine it might be sort of a novelty to go out and buy pot without the worry of breaking the law, but I honestly don’t think making it legal will suddenly make people like myself decide to become stoners. Just like my thoughts on other types of habits, if you don’t have the money and are hurting yourself or others with your vice, I think you should stop.

Should Pot Be Legal Everywhere?

For my answer, it really depends on the day of the week you ask me. Sometimes, I feel like having marijuana dispensaries is no different than having liquor stores. People are going to use it anyway, so why not collect revenue to be used for the betterment of the state?

Yes, I think marijuana can be a gateway to harder drug use, but I know tons of people who have smoked pot in the past that never went on to be junkies or burdens to society. I think if you have that type personality and/or trouble in your life, you’d find a way to self destruct, with our without legal weed. I don’t think anyone under 21 should have easy access to marijuana. Will legalization make this harder or easier? I’m not sure. I guess if the price comes down enough to put black market sellers out of business, it might not be a bad thing to have sales regulated.

What I do think we need before opening the flood gates is some sort of easy measurement for what is recreation and what is impaired. Up until January 1st, if you were pulled over and found to be high as a kite, your butt went to jail. Now, who knows? What is the acceptable limit for smoking pot and driving, working, taking care of your kids?  The law states that if you have 5 nanograms of active THC in your blood, you are legally impaired, but how can a cop know that on the side of the road at 2AM? What if you have a drink and a toke? I think we can all agree that pot, like alcohol or any other legal or illegal drug, has the potential to alter our ability to make sound decisions. Where is the line between mellow and dangerous?

Like it or not, I think we will see other states start to legalize marijuana, especially if it proves to be the financial windfall that the folks at the state capital in Denver feel it will be. Marijuana sales are expected to bring in over $65 million in tax dollars this year, a third of which will be used to build new schools. I can see the dedication plaques now, “This school brought to you by the stoners of Colorado.”

Perhaps I’ve found my new side hustle. Come visit me, and I’ll buy an ounce of pot for you out of towners, plus a 10% commission, of course.*

Would you buy marijuana if it were legal in your state? What do you think tax money from pot sales should be used for?

*The law states that I can share my ounce legally with anyone over age 21, but I can’t sell it. Sorry!

Image:Freedigitalphotos.net/Paul

 

 

 

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

42 comments

  1. Ha, I never thought about the tax aspect! How does 25 percent compare to the normal taxes (sales and whatever), and is that on top of that or does it replace those?
    eemusings recently posted..Enough with the whistling, alreadyMy Profile

    • There is also a 2.9% regular state sales tax plus whatever local governments add on. Pot will be the most highly taxed product in Colorado by far, but I think that was the whole point of legalization.

  2. When I first heard about this I was like – “WHAT!”

    Then I started to think about it and it made a lot of sense. I mean people are going to smoke it anyway, so now the state benefits through taxation, more people are employed and there are sure to be quality controls and limits on what people can purchase. It all makes me wonder why it wasn’t legalized a long time ago?
    Glen @ Monster Piggy Bank recently posted..Saving Money an Extra Dollar at a TimeMy Profile

  3. I don’t want to get into a debate here (though I may be asking for it by starting my comment with that haha) but I am strongly in favor of legalizing and regulating marijuana. I have never used nor do I intend to, but after researching this issue pretty in-depth the past few years it’s completely illogical to have it illegal. It’s FAR less harmful than alcohol and if people were given the choice between the two I think at least some people would choose the safer choice – marijuana.
    DC @ Young Adult Money recently posted..15 Ways to Improve your Finances in the New Year – Part 1My Profile

  4. I think a significant amount of the money should go to evidence-based drug education programs for youth. I think that the proliferation of weed is going to increase youth experimentation and I would be worried that youth aren’t using it responsibility. It’s probably a lot easier to get through the highs and lows of high school when you’re high, but you miss out on developing the essential coping skills that you learn along the way.
    Rebecca @ Stapler Confessions recently posted..January 5 STAPLES deals: Moneymaker and Storage Discounts!My Profile

    • I would think that some sort of drug awareness programs should be part of the profits, but that would probably be too simple.

  5. Political issues aside, I just have to laugh when it looks like the state (whichever one that may be at the time) does something like this hoping to get tax money and the local areas may not be as in favor of it. I agree that if it does become a windfall, or even a partial windfall, that other states will follow suit – it’s inevitable in my opinion.
    John S @ Frugal Rules recently posted..Retirement Planning Tip for the Self-Employed: Don’t Make My MistakeMy Profile

    • I see the side of the locals. They are the ones who are dealing with enforcing the laws and keeping everyone safe. When medical marijuana passed, there were many shops that opened up. It was kind of like a few old standby businesses, empty stores, and 5 pot shops in our downtown. Then the town council put some regulations in place, and all but one of them have shut down. I think they are being a bit more thorough with this law because we’ve kind of seen it before.

  6. Wow! I had no idea that the tax will be so high. I know over the last few years there have been so many medical marijuana shops pop up, but they are hit with so many regulations and licensing fees that it almost makes it not worth it at all.
    My Money Design recently posted..Niche Website Update 13 – NS3 May Be Lost But We Still Made $933 in Passive Income!My Profile

    • We had 5 that opened up in our small town, but all but one of those have closed because of the strict regulations. If you think any Cheech and Chong can open up a shop and make bank, it certainly isn’t that easy. You have to be a pretty sharp businessperson.

  7. Although I’m not necessarily against legalizing dope, I have got to disagree with DC about it being “less harmful”. Having had my fair share of time “doped up” and known LOTS of people who have or still are, it is definitely JUST as dangerous as alcohol, both from a DUI standpoint and a personal standpoint. Been there, done that, and let me just say that it is NOT good. You don’t want to be on the road next to a stoned person any more than you are next to a drunk person, and dope will kill your brain cells just as easily as alcohol will.
    Laurie @thefrugalfarmer recently posted..What to Do When You Wake up to Find Yourself Deep in DebtMy Profile

    • Any substance that can alter your mental status can be dangerous, including things you have a prescription for. I don’t think anyone should be driving or taking care of kids while under the influence of anything.

  8. “This school brought to you by the stoners of Colorado.” Haha…how ironic. We spend so much time as teachers and parents telling kids to avoid the vices of life. What’s this message sending them?
    Brian @ Luke1428 recently posted..Some Unforeseen but Realistic Drawbacks to Chasing Your DreamMy Profile

    • I’m not sure how I feel about people’s vices supporting schools. New Mexico has had a lottery scholarship for years that pays full in state tuition to any kid who gets accepted and maintains a C average or better. I guess if people are going to blow their money gambling or smoking pot, kids might as well benefit. It is kind of hard to say don’t gamble or smoke pot, but enjoy your new school or free tuition.

  9. I would probably buy marijuana if it were legal in my state. Why not? It isn’t any worse than drinking a bunch of gin-n-tonics or something. Plus, no hangover. Score!
    Holly@ClubThrifty recently posted..A Craigslist Conundrum: What Would You Do?My Profile

  10. Should be interesting to see how it goes. I smoked when I was in college and eventually quit because I felt like it was getting in the way of a lot of goals. I have no idea whether making it legal will increase the number of users, but I generally agree with you that people with destructive behavioral tendencies will find one way or another to make them happen.
    Matt Becker recently posted..Traditional vs. Roth IRA: Some Unconventional Wisdom on Which is Better for Young InvestorsMy Profile

    • It will certainly be curious to follow how it goes. I actually grew up in a dry county, which is still dry to this day, but I don’t think that encourages or discourages drinkers. You’ll find a way to do it if you want, so why lose the revenue? I’ve always thought this of my hometown.

  11. I am not sure if I would smoke it if it were legal or not. The one thing that I hear from many of my law enforcement buddies is that they should legalize it in more states. They spend so much money on tracking growers and busting people for these little offenses. The gateway drug issue for MJ is almost non-existent. Most pot smokers don’t transition to the harsher drugs. That is just used by the federal government to keep it a felony drug.
    Grayson @ Debt Roundup recently posted..How To Make More Money – Ways To Earn Extra IncomeMy Profile

  12. I’m all for the legalization of marijuana even though I’m not a smoker. What a great source of tax revenue!
    Stefanie @ The Broke and Beautiful Life recently posted..Automate to SaveMy Profile

  13. I would’t buy it if it were legal because I’m just not interested, although I’ll be the first to admit I have tried it on more than one occasion, but to be quite honest it still felt like “smoking” to me which tasted totally gross. I feel exactly like you do about the pros and con of it though. Not bad…but can be…but so can alcohol or prescription drugs. As far as what the tax money should go to? Probably education. Or building more rehab facilities. lol!
    Tonya@Budget and the Beach recently posted..Adventures Around the World: Life as a Travel Club OrganizerMy Profile

    • I certainly agree with the whole smoking comparison. I can’t stand the smell of cigarettes or pot, so I guess that counts me out.

  14. Well, if you live in LA and walk along Venice Beach, you’ll see your fair share of medicinal marijuana shops. :) I think states are highly motivated by the potential tax revenue they can earn and so desperately need. In some ways it feels strange as they use to prosecute you for buying drugs and now they want to make money off you for doing it. :) . As you mentioned, I’m curious as to when you are considered impaired and cannot legally drive, etc.
    Shannon @ The Heavy Purse recently posted..4 Smart Financial Moves to Start the New YearMy Profile

    • I do hope there is some resolution about legal limits and what you can do within those limits. Before if you showed up for work smelling like pot, you’d probably get fired. I’m not sure what will happen now if it’s legal to smoke. I guess it would be no different than drinking on the job and I’d hope people have common sense not to.

  15. Debt and the Girl

    I heard prices went through the roof in Colorado and that they are being charged a hefty state tax. I don’t smoke weed so I am not all that familiar with prices. It does kind of rock that some of that tax money is going to help build schools

    • Prices did go up within 24 hours of opening up in Denver due to demand. I think it will level out when more stores are allowed to open. It’s sad that we have to sell weed to get money for schools, but you’re right that at least it goes to a good cause.

  16. For most things I’m of the mind of legalizing, regulating, and taxing if there are negative externalities associated with the product is the best possible plan. I’m curious to see what happens in surrounding states, especially along the borders.
    Mrs. Pop @ Planting Our Pennies recently posted..Updated Thoughts On ZillowMy Profile

    • One sheriff in a border town in Wyoming was quoted as saying that marijuana use had risen in his town since medical marijuana was approved in 2010. Honestly, all you have to do to get a card is pay a doctor $200 and tell them your back hurts, so anyone who wanted to buy it could. However, you can tax recreational pot at a higher rate, so I’m sure that’s why so many licenses have been approved. Some of the states surrounding us are much more conservative, like Wyoming and Utah, so I’m not sure legalization would fly there. I can never see Utah allowing legal marijuana, but their liquor laws used to be really strict until the winter Olympics. I guess there is always a battle between the conscience and the wallet.

  17. Fascinating, I’ve been quite curious, thanks for writing this! I have no idea what weed costs here (black market). I think it was $5 a joint in high school, but a lot less if you were buying more.
    Here’s what I will be interested in (nerd alert): the effect on crime rates in about five years, because if your (highly likely) guess is that legal prices will come down, the money that goes to fund crime will dry up.
    Anne @ Unique Gifter recently posted..A Risqué Wedding Gift IdeaMy Profile

    • There are certainly some issues of society that I am curious about in the future. I believe in the articles I read, you can buy a single joint for $10, but I have no idea how many joints an ounce of pot would make.

  18. I voted against legalizing pot in Washington…because I hate the smell! I certainly recognize that taxing marijuana could benefit the state, but my dislike for the smell won out!
    Becky @ RunFunDone recently posted..Seattle Half Marathon 2013My Profile

  19. I wouldn’t buy it cuz then I would never have the initiative to come check out your blog, plus the Cheetos fingers would really make my iPad disgusting.
    Kyle @ Rather-Be-Shopping.com recently posted..5 Tips to Save Money and Get Mucho Chow at Chipotle GrillMy Profile

  20. Kim, loved this post more than you know. Especially the side hustle you’re considering. Sounds like a great profit stream!
    In all seriousness, I don’t smoke, and don’t intend on it, but I think it should be legalized. It’s not the job of the State to select which vice people can have. If people can get drunk, they should be able to get high.
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  21. I’m in full favor of legalization. Like DC says, marijuana has little to no negative health side effect, outside of the fact that they can cause lung cancer the same way as cigarettes (inhaling smoke regardless of where it comes from is terrible for lungs… even incense is bad!). Obviously, like Laurie states, no one should be driving, taking care of minors, or operating heavy machinery while under the influence and laws should reflect that.

    I’m curious to see how Colorado turns out with this because if it’s successful, more states will join in.
    Tara @ Streets Ahead Living recently posted..Materialistic Envy is So Easy to CatchMy Profile

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