Politics & Policy

Welfare Money Goes to Pot In Colorado

Thousands of dollars in public withdrawn at marijuana-shop ATMs.

During the first month of Colorado’s experiment with legal marijuana, welfare beneficiaries withdrew thousands of dollars in public-assistance cash from ATMs at weed shops, according to records obtained by National Review Online.

At least 64 times, public-assistance benefits were accessed at businesses selling marijuana. A total of $5,475 in public benefits was withdrawn at ATMs in establishments that sell pot. This figure includes medicinal dispensaries, recreational stores, and at least one place that combines the two. Some of these establishments sell groceries as well as pot, so there is no way to know exactly how much welfare money was spent on marijuana.

The amounts withdrawn ranged from $20 to $400, averaging $85.55, according to the transaction records. In Colorado, the average household receiving Temporary Assistance for Needy Families (TANF) benefits includes one adult and two children, and the maximum monthly benefit for them is $462. #ad#

Both the number of transactions and the amount withdrawn represent only a small fraction of the more than 42,000 electronic-benefits-transfer (EBT) withdrawals that occurred in Colorado in January. Nonetheless, the transactions demonstrate the Centennial State’s lack of oversight of improper use of welfare benefits.

Colorado lawmakers recently failed to pass legislation that would have prohibited EBT withdrawals at retail marijuana shops, medical-marijuana dispensaries, and strip clubs. Last year, they passed legislation forbidding such transactions at gambling establishments, gun shops, bars, and liquor stores.

“When we passed Amendment 64 to legalize marijuana, the main mantra of the campaign was, ‘Legalize marijuana like alcohol,’” Representative Dan Nordberg, a Republican from Colorado Springs, tells NRO. “But the bill was killed in the state senate, party line. Truth be told, you would think this is common sense, yet I’ve still not received a straight answer for why [Colorado’s Democrats] killed our bill and think it’s okay for welfare beneficiaries to withdraw public benefits in pot shops and strip clubs.”

Right now, the Colorado Department of Human Services’ Employment and Benefits Division has no legal authority to prevent public-benefit withdrawals at marijuana stores, says director Levetta Love. “We cannot assume that somebody who has accessed money at a retail marijuana shop has spent that money on marijuana,” Love observes. “There’s no correlation there. We don’t have any proof of that.”

Federal TANF funding is given in a block grant to states, which are tasked with administering the benefit. According to the Center for Budget and Policy Priorities, “in 2012, Colorado spent $124 million in federal TANF block grant funds.”

In 2012, Congress passed the Middle Class Tax Relief Act, which requires states to “maintain policies and practices as necessary to prevent assistance provided under the State program funded under this part from being used in any electronic benefit transfer transaction in any liquor store; any casino, gambling casino, or gaming establishment; or any retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.” The law fails to address marijuana stores.

Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow for the Independent Women’s Forum. Ishianose Omofoma helped conduct research for this story.

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