Cannabis provides a pot of gold for university scholarships

Colorado’s excise tax set to raise millions of dollars to support college access

March 25, 2017
Two people dressed as cannabis leaves
Source: Reuters
Budding hopes: a tax on marijuana grown in Pueblo County will mean ‘guaranteed scholarships’ for high school graduates

Two US communities are giving new meaning to the term “higher education”.

Pueblo and Adams counties in Colorado – one of the growing number of states that have legalised the sale of recreational marijuana – are putting proceeds from taxes on weed into what appear to be the world’s first cannabis-supported university scholarships.

After all, said Sal Pace, the commissioner of Pueblo County, other scholarships in the US are already underwritten by taxes on alcohol sales and proceeds from long-odds government-sanctioned lotteries.

Unlike with a lottery ticket, Pace said, “At least with cannabis, you get what you pay for.”

The 2 per cent excise tax on marijuana grown in Pueblo County will generate nearly $500,000 (£401,000) for scholarships for students who graduate from local high schools this spring; that’s 10 times as much as the scholarship assistance that the county was able to provide last year.

Each of those graduates will get at least $1,000 to attend a local two-year community college or the Pueblo campus of the public four-year Colorado State University beginning in the autumn; all they have to do is fill out an application.

“You are guaranteed a scholarship,” said Pace. But requiring students to opt in, he said, means that no one who disapproves of the source of the aid has to take it.

“If you have your own moral objections, you can forgo the money,” Pace said.

There’s certainly plenty of need for it. The community college charges about $3,000 a year, and the public university $6,000, while 44 per cent of students in the county’s schools are poor enough to qualify for a free or reduced-price lunch, meaning that their families make between 30 per cent and 85 per cent above the poverty rate.

Local voters last year overwhelmingly approved the excise tax, which will gradually rise to 5 per cent, providing much more money for students. And while there was no polling done about why they backed the tax, Pace said that voters were likely attracted to the scholarship idea.

“I’d like to say yes,” he said. “Too many kids can’t afford to go to college.”

As for criticism of supporting students with a tax on a substance that’s still illegal to possess in many other places, it’s come largely from critics outside the state who argue that the measure is at odds with efforts to prevent young people from smoking pot.

There’s been great momentum in the US for legalising marijuana. Twenty of the 50 states and the District of Columbia allow it to be sold for medical purposes; Colorado is one of eight states that have now approved its sale for recreational use, along with Alaska, California, Maine, Massachusetts, Nevada, Oregon and Washington. (What will happen if the Trump administration follows through on suggestions that it will crack down on legal marijuana sales is unclear.)

About $1 billion worth of recreational marijuana was sold in Colorado last year, generating a total of $122 million in sales and excise tax revenue.

That money once would have gone to drug cartels and dealers, Pace said. Now, he said, it can be used for education.

Pueblo is uniquely positioned to capitalise on this. It’s in a largely agricultural part of the state where the climate is temperate, and where marijuana cultivation is predicted to expand significantly. The county already grows a fifth of the marijuana sold in Colorado.

Officials expect the local excise tax to produce $3.5 million a year by 2020, half of which would go for scholarships.

Adams County’s sales tax on marijuana also makes about $500,000 available for scholarships for low-income students, matched by a similar amount provided by the state, as long as they attend a Colorado public institution.

The county’s authority to levy a sales tax on a single product has been challenged in court, but the scholarships continue to be given, officials there said.

Pace, who has taught American government at Pueblo Community College and Colorado State University-Pueblo, said that he expects the idea to spread.

“The opportunity for higher education is so critically important,” he said. “We need to make it easier for people to afford and go to college.”

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