Colorado awash with weed cash, state giving it back to taxpayers

Colorado has been so successful in implementing legal weed that it is awash with cash and the state is now giving it back to the taxpayers.

When voters in Colorado passed the amendment to make marijuana legal, one of the factors behind it was definitely financial gain.

With the government able to put a hefty tax on the sale of weed, they wouldn’t have to make as many cuts and could probably save a lot of money, however they didn’t expect to make so much.

It’s been reported by Associated Press that they have made so much cash that they are about to pass the limit of the amount of money they’re allowed to actually make from taxes. It means the taxpayers could be in line to receive a cut of the $50 million profits accumulated by the legitimate sale of marijuana.

The taxes were originally designated to be used on school construction and people selling the weed said they had ‘no problem’ paying taxes if it was going back into the area’s education services.

However, the ‘Taxpayer’s Bill of Rights’ which was passed in 1992, states that Colorado cannot spend revenue if they grow faster than that of population growth and inflation, unless the people approve a change. This means that the citizens could be in line for an extra payday thanks to the pot business.

The local politicians though are hoping for a vote so that they can keep the cash. They’ve already estimated that they will make around $1 billion in a year from sales and have saved between $12 and $40 million in the law enforcement budget while focusing more time on criminal activity unrelated to marijuana.

A TABOR in New Zealand would certainly be welcome.

Meanwhile the Federal government is being obstructive with the new business.? ?

It was zero degrees in Denver on a late December morning, and the ice-covered streets were mostly empty. Mark Mason, wearing a full-length black coat, green wool hat and sunglasses, sat in a white Buick LaCrosse, eyeing the squat building across the street. It was the local branch of the Federal Reserve Bank.

?Behind that gate, that?s where the armored cars come in,? he said, pointing to a parking lot. ?They?ve got a bunch of money in the basement ? a bunch.?

For some months, Mr. Mason, 54, has been thinking about the bank and how, he said, ?to break in.? Not to take money, but to leave it. Mr. Mason and a group of other entrepreneurs in Colorado want to start the first-ever financial institution established specifically to serve the pot industry. To do that, they need to make deposits in a Federal Reserve account, and the agency hasn?t let them. Such humdrum administrative decisions are made all the time by federal banking officials, but this one raises big political and legal issues between the federal government and the state of Colorado over the legalization of marijuana.

Mr. Mason and his business partners have already received a license from the state of Colorado for their Fourth Corner Credit Union. They have leased a building in downtown Denver, put up a Facebook page and generated predictable jokes on late-night TV. Jimmy Fallon: ?If you think the line is slow at your bank …?

Medical marijuana has been legal in Colorado since 2001, and recreational marijuana use became legal a year ago. But marijuana businesses have had limited, if any, access to banking services. The federal government considers marijuana illegal and so traditional banks, fearing prosecution for aiding and abetting illegal drug dealers, have shut down pot-business accounts and declined to give loans. Some banks have ferreted out pot entrepreneurs by sniffing their bills, leading to a countermove: bills sprayed with air freshener.

Without a bank account, pot businesses deal in cash, lots of it, held in safes, handed out in clipped bundles on payday, carried in brown paper bags and cardboard boxes to the tax office and the utility company, ferried around the state by armored vehicles and armed guards. And without access to essential banking services ? from credit cards to electronic transfers to loans ? those businesses pay a huge premium. The reality in Colorado is that it is legal to grow pot but extremely hard to grow a pot business.

Bureaucrats have never solved a problem in the history of the world.

The Fourth Corner partners saw a need and a business opportunity. State accreditation in hand, the partners took a step this November that typically goes off without a hitch: they applied to the Federal Reserve Bank for a ?master account.? This is the account they would use to deposit funds and transfer them electronically with other banks ? the lifeblood of commerce.

Mr. Mason could not find a case of a state accredited financial institution being denied a master account. Usually, approval comes in days, he noted. But it has been nearly three months since the application was filed and there has been no answer, just a letter in early January saying the request was under review. Mr. Mason said the application was on the desk of a specialist in bank risk, a guy named Ryan Harwell in Kansas City, the Fed?s Midwest regional office that oversees the Denver branch.

While the Federal Reserve declined to comment ? as a matter of policy, its officials don?t comment on pending applications ? Mr. Mason suggested a reason the Fed may be wary of granting the account.

?This legitimizes the marijuana industry to the extent it?s never been legitimized before,? he said. If Fourth Corner gets approval, businesses would have a place to deposit and to borrow. Other institutions might well follow, and the federal government ?would become complicit, and the walls start tumbling down.?

At the same time, Mr. Mason argued that the Federal Reserve Bank was not only within its rights to approve the credit union but was obliged to do so.

The eight?most dreaded words in the world are “I’m from the government, I’m here to help.

Imagine what would happen to the government coffers in New Zealand if the politicians got off their high horse and legalised cannabis.

–, NY Times