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Colorado Moves to Tax Medical Marijuana

The Attorney General of Colorado said yesterday that his state can collect taxes on sales of medical marijuana.

"Medical marijuana is tangible property that is generally subject to state sales tax," Attorney General John Suthers said in an opinion, according to The Denver Post.

Suthers, a Republican, was responding to a query from the state's governor, Democrat Bill Ritter.

"This is another in a series of significant steps toward some sort of legalization of marijuana," said CBS News Legal Analyst Andrew Cohen. "Once local and state officials in Colorado and elsewhere realize how much income they can generate from this tax it will be harder for them or anyone else to argue that pot shouldn't be legalized and regulated in some fashion."

In response to the opinion, the Post reports, the governor's office says it will direct businesses that offer medical marijuana to obtain retail licenses and begin paying sales taxes. Special Report: Marijuana Nation

Ritter's spokesman said the move to regulate the industry comes amid "chaos" in medical marijuana distribution tied to a rise in dispensaries this year. (The state legalized medical marijuana in 2000.)

The move was welcomed by the director of a group that represents medical marijuana dispensaries and their clients and doctors who write prescriptions for the drug in Colorado.

"I think the community is willing to pay taxes if it will help prove the legitimacy of their efforts," Courtney Tanning of the Colorado Wellness Association told the Post. She said the medical marijuana industry "has been an underground, black-market community for so long that I think they're really willing to…pay dues to be taken seriously."

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