The State of Colorado did not make money overnight. When recreational marijuana use became legal on January 1st, 2014, the state had only made about $1.4 million in sales in the first month. By December of that year, those sales had risen to $5.4 million.

The total haul for Colorado’s pot sales (including both medical and recreational) in 2014 was approximately $76 million. But legalizing marijuana did not eliminate the black market nor did it solve the state’s budget problems.

“Everyone who thinks Colorado’s rolling in the dough because of marijuana is wrong”, said state senator Pat Steadman. The state had to quickly set a tax value to a product with no legal sales history in the United States and as a result, have struggled to establish a wholesale cannabis price.

“Taxing a percentage of price may simply not work”, said Pat Oglesby, a former congressional tax staffer. Pat also pointed out that Alaska and Oregon (two latest weed friendly states) are both still working on retail regulations but will tax marijuana by weight, similar to tobacco.

Because Colorado was the first government anywhere in the world to regulate cannabis production and sales, other states are watching closely. There was a large difference in opinion as to how much money Colorado would make and the final numbers contain important lessons for any State considering the legal marijuana market.