Article Summary State Tax Revenue from Marijuana Sales in Colorado Has Surpassed

Essay

Article Summary
State tax revenue from marijuana sales in Colorado has surpassed $500 million since its legalization in January 2014. Colorado has imposed three types of state taxes on marijuana: a 2.9% sales tax on medical marijuana, a 15% special sales tax for recreational use, and a 15% excise tax on wholesale marijuana transfers. About half of the accumulated tax revenue has gone to K-12 education, with over $100 million used to fund school construction projects. Twenty-five percent of the tax is being spent on substance abuse prevention and treatment programs.
Source: Katelyn Newman, "Milestoned: Colorado Pot Tax Revenue Surpasses $500 M," usnews.com, July 20, 2017.
-Refer to the Article Summary.Suppose the sale of marijuana is legalized in Florida, and the state decides to charge a tax of $50 per ounce on each sale, with the state claiming that retailers will bear the entire burden of this tax.Draw a graph illustrating the situation where retail outlets would bear the entire tax burden of $50 per ounce of marijuana.Explain what would need to be true about the demand for marijuana for retailers to bear the entire burden of this tax, and if this would likely occur if marijuana sales were legalized.