February 27, 2014 / Corona, CA / ACCESSWIRE / Extreme Biodiesel Inc. (XTRM) wholly owned subsidiary XTRM Cannabis Ventures announced today that the legal marijuana marketplace in Colorado is exceeding the states tax expectations.
Colorado’s legal marijuana market is far exceeding tax expectations, according to a budget proposal released this month by Gov. John Hickenlooper that gives the first official estimate of how much the state expects to make from pot taxes.
The proposal outlines plans to spend some $99 million next fiscal year on substance abuse prevention, youth marijuana use prevention and other priorities. The money would come from a statewide 12.9 percent sales tax on recreational pot. Colorado’s total pot sales next fiscal year were estimated to be about $610 million.
Retail sales began Jan. 1 in Colorado. Sales have been very strong, though exact figures for January sales won’t be made public until sometime early next month.
The governor predicted sales and excise taxes next fiscal year would produce some $98 million, far above a $70 million annual estimate given to voters when they approved the pot taxes last year. The governor also includes taxes from medical pot, which are subject only to the statewide 2.9 percent sales tax.
In Colorado, Hickenlooper’s proposal listed six priorities for spending the pot sales taxes.
The spending plan included $45.5 million for youth use prevention, $40.4 million for substance abuse treatment and $12.4 million for public health.
“We view our top priority as creating an environment where negative impacts on children from marijuana legalization are avoided completely,” Hickenlooper wrote in a letter to legislative budget writers, which must approve the plan.
The governor also proposed a $5.8 million, three-year “statewide media campaign on marijuana use,” presumably highlighting the drug’s health risks. The state Department of Transportation would get $1.9 million for a new “Drive High, Get a DUI” campaign to tout the state’s new marijuana blood-limit standard for drivers.
Also, Hickenlooper has proposed spending $7 million for an additional 105 beds in residential treatment centers for substance abuse disorders.
“This package represents a strong yet cautious first step” for regulating pot, the governor wrote. He told lawmakers he’d be back with a more complete spending prediction later this year.
The Colorado pot tax plan doesn’t include an additional 15 percent pot excise tax, of which $40 million a year already is designated for school construction. The governor projected the full $40 million to be reached next year.
The initial tax projections are rosier than those given to voters in 2012, when state fiscal projections on the marijuana-legalization amendment would produce $39.5 million in sales taxes next fiscal year, which begins in July.
The rosier projections come from updated data about how many retail stores Colorado has (163 as of Feb. 18) and how much customers are paying for pot. There’s no standardized sales price, but recreational pot generally is going for much more than the $202 an ounce forecasters guessed last year.
Mason Tvert, a legalization activist who ran Colorado’s 2012 campaign, said other states are watching closely to see what legal weed can produce in tax revenue.
“Voters and state lawmakers around the country are watching how this system unfolds in Colorado, and the prospect of generating significant revenue while eliminating the underground marijuana market is increasingly appealing,” said Tvert, who now works for the Marijuana Policy Project.
Meanwhile, The Denver Post reported Wednesday that banks holding commercial loans on properties that lease to Colorado marijuana businesses say they don’t plan to refinance those loans when they come due. Bankers say property used as collateral for those loans theoretically is subject to federal drug-seizure laws, which makes the loans a risk.
Colorado’s two largest banks, Wells Fargo Bank and FirstBank, say they won’t offer new loans to landowners with preexisting leases with pot businesses. And Wells Fargo and Vectra Bank have told commercial loan clients they either have to evict marijuana businesses or seek refinancing elsewhere.
“Our policy of not banking marijuana-related businesses and not lending on commercial properties leased by marijuana-related businesses is based on applicable federal laws,” Wells Fargo spokeswoman Cristie Drumm told the Post.
XTRM President Joseph Spadafore stated “We are interested, and are currently looking into potential investments in Colorado whereas XTRM would purchase Commercial Notes from institutions not wishing to lend to landlords any longer. There’s plenty of opportunity in the cannabis industry and we intend to be there for it.”
Recent XTRM Update
40 Acre Hemp / Medical Marijuana Land Project Update
The Company is pleased to report that it plans to close escrow on the property on or before March 20th, 2014.
The project, when built out is expected to use the 40 acres to accommodate up to five 20,000 sqft warehouses for indoor marijuana / cannabis growth, 20 acres for outdoor Hemp cultivation for biodiesel, and an industrial center to process marijuana / cannabis into smokeless products.
President Joseph Spadafore stated “The passage of the Farm Bill and Marijuana Legalization Progress has really generated vast opportunities for XTRM. We have already identified two additional parcels of land in California that are candidates for our planned Hemp To Biodiesel project and Marijuana cultivation once approved by any state and/or federal authorities. Once the 40 acre parcel is closed next month we plan to acquire at least 1 more parcel of land”
About Extreme Biodiesel and XTRM Cannabis Ventures
Extreme Biodiesel is an alternative fuel and recycling company. Our mission is to provide a cost-effective, high-quality alternative diesel fuel, create “green” jobs, reduce the environmental impact of fossil fuels and diminish US reliance on foreign oil. Extreme Biodiesel is currently repositioning itself into a holdings corporation with focuses on Bio Diesel, Real Estate, Technology and Cannabis Sectors.
XTRM Cannabis Ventures is a wholly owned subsidiary of Extreme Biodiesel focused in the sector of Medical Marijuana, Cannabis and Hemp related products.
XTRM Cannabis Ventures Disclaimer
The Company would like to assure all investors that in all cannabis related actions the Company is conferring with counsel to be sure any business activities are deemed legal. XTRM advises all investors to see the website being developed at http://xtrmcannabisventures.com/
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Safe Harbor Disclaimer
Forward-Looking Statements are included within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, including words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements and involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. XTRM is under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.