Colorado's missing marijuana taxes...Not Really..

originally posted by: ketsuko
I would say that the 27% tax rate is likely the root of the problem more than anything else. The higher the tax rate goes, the more likely it is to push the cost up to the point where the black market remains a more effective alternative for buyers and sellers than the legal market.

Look at the cigarette tax rates as a comparison. New York state has a $4.35/pack tax on cigarettes, and they are now busting major black market cigarette rings.

If they don't make it more cost effective to buy legally, then they aren't going to make a dent in the marijuana black market in Colorado. Instead, they are just going to make themselves a handy market for all the cartel customers.

One of the biggest things that's keeping a black market going was the option for cities to opt out of selling recreational marijuana. Colorado Springs is a prime example of this. They voted to ban the sale of recreational MJ in their city limits (so they wouldn't jeoperdize their military contract. Apparently they're worried the feds will move the USAFA and Cheyenne Mountain) which has meant that there is no legal recreational outlets in Colorado Springs and either you have to drive 20 minutes to Falcon/Manitou Springs, or buy off the black market. There's other communities that have banned the sale of rec too, and so in those areas the black market will be the only market.