Overlook the pandemic growth in marijuana gross sales — Colorado now collects fewer marijuana tax {dollars} than it did in 2018.
About half the nation now has joined Colorado in legalizing leisure marijuana, with a complete of 24 states and Washington, D.C., regulating the drug. The unfold of legalization has taken a toll on Colorado’s extra established hashish market, with the wholesale worth of authorized marijuana falling to its lowest recorded stage, in accordance with state price range paperwork.
However a brand new evaluation by Joint Funds Committee workers discovered that there’s one other issue responsible for the decline of Colorado’s marijuana trade: the rise of intoxicating hemp.
In 2018, Congress legalized hemp by means of the federal Farm Invoice, a change that was aimed toward permitting its use for issues like textiles, not leisure medication.
There’s a restrict on how a lot THC could be current in legalized hemp. However the federal adjustments have nonetheless resulted within the creation of a $2.2 billion quasi-legal marketplace for intoxicating hemp merchandise, together with THC-infused seltzers, brownies and gummies that at the moment are popping up in fuel stations, farmers markets and CBD shops throughout the nation.
“You’ve put a fairly sturdy regulatory construction in place round marijuana, and you’ve got this product that’s form of laughing within the face of that construction,” Craig Harper, the JBC workers director, advised lawmakers at a price range listening to final week.
California’s governor lately issued an emergency order banning intoxicating hemp merchandise, whereas Colorado in 2023 handed a invoice to limit them to licensed marijuana sellers.
State attorneys normal, together with Colorado’s Phil Weiser, are pushing Congress to place stricter limits on hemp, saying their very own efforts to crack down on the trade have been stymied by authorized uncertainty.
However within the meantime, Colorado’s authorized marijuana sellers are seeing much less client curiosity of their extremely regulated merchandise.
Marijuana gross sales — and the tax income they generate — peaked in Colorado within the 2020-21 price range yr, when the state collected $424 million in gross sales and excise taxes. That fell 41% to $248 million within the 2023-24 price range yr.
For years, price range officers have warned that the growth occasions wouldn’t final as soon as client conduct returned to pre-pandemic ranges. At this time, nonetheless, marijuana tax collections have even fallen beneath what they generated in 2018 and 2019 — and it’s not clear if we’ve reached all-time low.
The governor’s Workplace of State Planning and Budgeting expects income will lastly stage off this price range yr, growing barely to $267 million, then $285 million subsequent yr. However Colorado Legislative Council Workers isn’t so certain; they’re projecting tax collections to fall once more this price range yr to $242 million, earlier than ticking as much as $250 million subsequent yr.
Not all of that cash winds up within the Marijuana Tax Money Fund, both. In final yr’s price range, lawmakers had about $131 million to spend on issues like well being providers and regulation enforcement from the fund. The remaining will get transferred to varsities and native governments.
WHAT IT MEANS FOR THE BUDGET
Marijuana taxes are among the many few sources of state funding that may develop with out restriction in Colorado, as a result of voters exempted them from the Taxpayer’s Invoice of Rights income cap.
So in a yr the place the TABOR cap goes to pressure the legislature to make round a billion {dollars} in spending cuts, the marijuana tax downturn stings.
Final price range cycle, lawmakers already needed to reduce providers funded by marijuana taxes —together with a $20 million fee to BEST, a public faculty building grant program that the JBC voted to delay till subsequent price range yr.
Anticipate extra cuts in 2025.
Gov. Jared Polis has proposed chopping the BEST fee once more, however even that may not be sufficient to stability the marijuana fund price range. As of now, JBC workers initiatives that lawmakers should reduce an extra $19 million in marijuana spending from Polis’ price range request to keep away from dipping into the fund’s reserves.
And that’s beneath the extra optimistic forecast from the governor’s workplace. If the legislative workers forecast is nearer to actuality, lawmakers may wish to chop greater than double that quantity.
A county clerk, a billboard and the looming 2026 Colorado secretary of state’s race
Jefferson County Clerk Amanda Gonzalez’s workplace spent $7,200 on a get-out-the-vote marketing campaign that included a billboard with an commercial that prominently featured her image and identify.
Gonzalez’s workplace mentioned the marketing campaign, launched in mid-October, additionally included social media posts, neighborhood occasions and flyer distribution. The billboard alone value $4,000.
The workplace mentioned it discovered earlier than launching the marketing campaign that adverts that includes Gonzalez, a Democrat, have been excessive performing. Gonzalez’s spokeswoman mentioned that bolstered nationwide steerage and analysis exhibiting that native officers are essentially the most trusted messengers for election data and adverts that includes human faces are the best. The social media posts her workplace made additionally used likenesses of Commissioners Lesley Dahlkemper and Tracy Kraft-Tharp.
Commissioner Andy Kerr was on the poll operating for reelection this yr, and due to this fact didn’t take part. And for good motive.
It seemingly would have been unlawful for Kerr to seem within the adverts. A regulation the legislature handed in 2023 prohibits Colorado election officers from utilizing state or federal cash to pay for ads that prominently characteristic an individual who’s a declared candidate for federal, state or native workplace.
That provision within the regulation was added in response to adverts combating election misinformation run in 2022 by Democratic Secretary of State Jena Griswold’s workplace that prominently featured her as she was operating for a second time period. Her predecessor, Republican Wayne Williams, who was operating on the time to be the Colorado Springs mayor, additionally appeared within the advert.
Gonzalez isn’t a declared candidate for any workplace, however she is rumored to be desirous about operating for secretary of state in 2026. Democratic state Sens. Steve Fenberg, Jeff Bridges and Jessie Danielson are also within the combine, as is Gonzalez’s predecessor, former Jefferson County Clerk George Stern, one other Democrat.
Gonzalez declined to speak about her curiosity in operating for secretary of state. However in a written assertion, she defended the billboard as a part of her workplace’s get-out-the-vote efforts.
“It has all the time been my objective to make sure that each eligible voter is ready to forged their vote and have it counted, as a result of I imagine our democracy is stronger when everybody participates,” Gonzalez mentioned.
The workplace argued the marketing campaign was aimed toward serving to increase early turnout, which saves the county cash by mitigating logistical challenges that will have required further staffing.
“By encouraging early voting, we saved taxpayer {dollars} and posted outcomes quicker,” Gonzalez mentioned.
However the billboard that includes her picture and identify didn’t encourage early voting. It merely mentioned: “By mail, by drop field, or in-person: Vote by November 5.”
Sarah McAfee, a spokeswoman for Gonzalez, mentioned the Jefferson County Clerk and Recorder’s Workplace finds “that telling voters particularly to vote early can create questions on why … nonetheless, merely reminding them of the deadline spurs motion to get it executed.”
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8TH CONGRESSIONAL DISTRICT
Add Adams County Commissioner Emma Pinter to the listing of Democrats who could run in Colorado’s eighth Congressional District in 2026.
Pinter advised The Colorado Solar on Monday that she was recruited to run within the district in 2022, however finally determined to throw her assist behind then-state Rep. Yadira Caraveo, who gained the race that yr. Caraveo was unseated by Republican state Rep. Gabe Evans this yr.
Caraveo hasn’t dominated out operating within the district in 2026 — and neither has Pinter.
“I believe we’re all nonetheless processing Nov. 2024 and the election’s implications for our neighborhood,” Pinter mentioned in a textual content to The Solar. She didn’t present a “sure” or “no” reply to the query of whether or not she’s desirous about operating for the seat in 2026.
SEVERANCE TAXES
In a bid to shut the state’s price range hole, Gov. Jared Polis has proposed sweeping $10 million in severance tax {dollars} into the final fund. A budget-balancing tactic lawmakers deployed following the Nice Recession, shifting severance tax {dollars} into the final fund permits the state to spend that cash on state providers somewhat than the grant applications sometimes funded by the tax on oil and fuel extraction.
The one-time change requested by Polis is bound to rile native governments, who’ve lengthy obtained a slice of severance tax cash as compensation for permitting drilling of their communities. However in a memo introduced to lawmakers Monday, Joint Funds Committee workers instructed going a step additional and making everlasting adjustments to the fund.
One thought supplied to the JBC: take $10 million a yr in perpetuity so the state can spend it on ongoing bills. One other suggestion: set an annual cap on severance tax income and preserve any quantity above that for the state to spend. Severance tax collections can fluctuate wildly from one yr to the subsequent, however the state has generated a median of $160 million a yr since 2000, in accordance with JBC workers.
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It’s been a very long time since a state senator resigned so quickly after being elected
It’s been almost 40 years since somebody elected to a four-year time period within the Colorado Senate has resigned quickly after their victory, as Democratic state Sen. Chris Hansen plans to do.
In 1987, Republican state Sen. John Donley resigned after being reelected to the Senate in 1986. His Senate District 16 seat based mostly in Weld County was stuffed in 1988 by then-Republican state Rep. Tom Norton by means of a emptiness appointment.
Emptiness guidelines require that when there’s a emptiness within the state Senate, the district be up for grabs within the subsequent normal election. However normally a senator resigns greater than midway by means of their time period, so the subsequent normal election occurs when the seat is up for grabs for a four-year time period anyway.
Nevertheless, when a senator resigns lower than midway by means of their time period, the subsequent normal election comes in the midst of the four-year time period, that means the election for the seat is for only a two-year time period. That forestalls the cycle of half of the Senate’s 35 seats being up for grabs each two years from being thrown off.
So in 1988, Norton needed to run to complete the 2 years remaining in Donley’s time period.
He gained, then Norton ran once more to signify Senate District 16 in 1990, when he was elected to a full, four-year time period within the chamber. He was reelected in 1994 — earlier than legislative time period limits have been totally in impact. He served as president of the Senate from 1993-1998.
Hansen’s coming resignation will create an analogous emptiness scenario.
The Denver Democrat was reelected Nov. 5 by an amazing margin. He plans to step down from his seat Jan. 9, a day after the 2025 lawmaking time period begins, as he turns into CEO of the La Pata Vitality Affiliation.
Hansen’s seat will probably be stuffed by a Democratic emptiness committee, however as a result of he’s leaving so quickly after profitable reelection, his substitute must run in 2026 for a two-year time period in the event that they wish to proceed representing his Senate District 31 seat.
If the substitute runs and wins in 2026, they might then be eligible to run in 2028 for a four-year time period earlier than they’re term-limited. They’d nonetheless get eight years within the Senate, simply in a roundabout manner.
VACANCY DOMINOES
Shaneis Malouff, chief of workers on the Aurora Larger Schooling Middle, plans to hunt a emptiness appointment in Home District 6 ought to state Rep.-elect Sean Camacho of Denver be chosen to fill Hansen’s seat.
Katie March, a former legislative aide who ran unsuccessfully to signify the district in 2022, can also be prone to pursue a Home District 6 appointment, ought to a emptiness come up.
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Corrections & Clarifications
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