New analysis shows tax revenues from cannabis in the billions
States that have legalized adult marijuana sales have seen billions in new tax revenues from cannabis, according to a new study.
The recently published study, courtesy of the Marijuana Policy Project, found that as of this month, “states have reported total tax revenues of $ 7.9 billion from legal adult marijuana sales,” while “cities and communities have also generated hundreds of thousands of dollars in new income from local adult cannabis taxes. “
This reported number includes the states of Colorado and Washington, where voters passed legalization measures in 2012 and where sales began in 2014.
Colorado has a 15 percent wholesale tax and a 15 percent specialty retail tax (neither of which applies to sales of medical cannabis in the state). As of 2014, Colorado’s estimated tax revenue from cannabis sales is $ 1,557,878,973. “$ 404.5 million of total cannabis tax revenue was used to improve the Colorado public school system.” The estimated tax revenue does not include “local sales tax revenue that was significant,” according to the study. For example, Denver generated $ 210.6 million in local tax revenue last month.
In Washington, where retail sales have been imposed at 37% and a sales tax of 6.5% as of July 2015, the estimated state tax revenue from cannabis sales is rounded to $ 2,568,728,290, and that figure does not include the estimated $ 167 million that between July 2014 and March 2021 were generated.
“Up until July 2015, taxes were quite high – 25% at three remittance points – making it difficult to compete with illegal sales. In addition to changing the tax rate to 37% in 2015, lawmakers created a medical endorsement program that adult businesses can apply for, ”the report said at length. “In fiscal years 2019 and 2020, state officials reported that 37% cannabis retail tax revenue exceeded alcohol tax revenue, even though many more adults consume alcohol than cannabis.4 For every $ 1 billion in cannabis sales revenue, tax Nearly $ 600 million is being invested in public health initiatives, including a fund that provides health insurance to low-income families. “
Oregon’s first adult marijuana sale began in 2016, but the state has generated $ 540,071,765 since then. In Alaska, state tax revenue from marijuana is estimated at $ 78,218,573 as of 2016. The record year came in 2020 when tax revenues exceeded $ 27 million.
“Eighteen states have passed laws legalizing, taxing, and regulating cannabis for adults aged 21 and over. Eight of the laws that were passed in 2020 or 2021, and seven of those states have not yet started approving and collecting taxes, “the report says legalization.”
“It does not include medical cannabis tax revenue, application and license fees paid by cannabis companies, additional income taxes collected by cannabis industry workers, or corporate taxes paid to the federal government,” it said.
Tax revenue from cannabis sales projected by advocates for legalization
The results of this study from the Marijuana Policy Project won’t surprise legalization advocates, who have long labeled adult use and medical marijuana a boon to the local economy.
An economic analysis published last year found that in Texas, where recreational marijuana remains illegal, legalization could generate new state tax revenues of more than half a billion dollars a year.
“A regulated cannabis market would be an economic boon for the Lone Star State,” said Vicente Sederberg LLP’s report. “Hundreds of millions of dollars in new tax revenue and tens of thousands of new jobs would be particularly helpful in overcoming the losses resulting from the COVID-19 pandemic. Texas leaves a tremendous amount of money on the table by illegally keeping cannabis. “