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Mo Money, Mo Problems: Colorado Struggling to Keep Cannabis Tax Money While Fighting Lawsuits

April 29, 2015

By now you know that Colorado is facing not one, not two, but three lawsuits over the state's legal recreational cannabis market. Both Nebraska and Oklahoma are suing their neighboring state, as well as a Washington, D.C.-based group called Safe Streets Alliance, and most recently a group of sheriffs and prosecutors from Kansas, Nebraska, and Colorado are chugging the Haterade and piling on the lawsuits.

Last month, Colorado Attorney General Cynthia H. Coffman responded to the Nebraska lawsuit, writing the following statement: 

"My office, as well as our partner state and local law enforcement agencies, are committed to stopping marijuana diversion. This lawsuit, however, even if successful, won't fix America's national drug policy-at least not without leadership from Washington, D.C., which remains noticeably absent."

She also pointed out that if the U.S. Supreme Court agrees with Nebraska and Oklahoma's lawsuit, it would wipe out Colorado's regulatory system but keep the legalization vote, a move that, according to Coffman, would result in "[nothing] but chaos on the other end of that decision." The Attorney General's Office recently filed a 36-page legal response, and right now Nebraska and Oklahoma are waiting to hear from the U.S. Supreme Court.

Meanwhile, remember that huge tax rebate generated from retail cannabis sales? Yeah, lawmakers don't want to do that. An anti-spending provision in the Colorado state constitution called the Taxpayer's Bill of Rights might require the state to refund close to $60 million in cannabis tax money, but state lawmakers want to keep the amount and put it towards funding school construction and regulating the cannabis market. 

Bipartisan legislators are currently cobbling together a bill that would seek permission from voters to keep the tax money. My reaction: 

Most people love refunds and hate taxes, a sentiment echoed by Gregory Golyansky, the president of the Colorado Union of Taxpayers. Said Golyansky:

“When government tries to keep the money that rightfully belongs to the taxpayers of Colorado, it is an enormous issue. There should be a tax refund.”

Oh, Colorado. It's not easy being a trailblazer. For the rest of you, we'll keep you updated on both stories as they continue to unfold.