States are making money from the boom in cannabis users

The U.S. Senate is about to debate and vote on SAFER Banking, which will help the cannabis industry for both security and practical business reasons. The House has already passed similar bills seven times, so hopefully it can look around and see the facts. And they should take note that states are making money from the boom in cannabis users. The additional tax revenue contributes to the competitiveness of households.

States with reported cannabis excise taxes totaled nearly $6 billion as of the third quarter of 2021. While the number seems tiny for the federal government, it is significant for the states. And reflects how consumers continue to increase marijuana income and spending!

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Companies are seeing an upswing, with market leader Canopy Growth reporting an 11% increase in revenue. The industry waits for helpful news in Washington, DC as the public settles for marijuana combined with alcohol for recreational use. Washington and Illinois are leaders in imposing cannabis taxes, but all legal governments benefit from them.

Photo by Kindel Media from Pexels

States are reporting another year of growth in 2022 and are expecting sales increases in 2023. A combination of more states becoming fully operational and the trend of adding marijuana into the mix and reducing alcohol consumption is one outlook for the market.

“Cannabis use will continue to increase as new states open up to adult-use sales and the stigma is removed. The reality is that cannabis is a less harmful recreational substance than alcohol and a valuable medicine for those who need it. As adoption increases, states can benefit by switching consumers to legal, tested products and collecting taxes on those sales,” said Jesse Redmon, head of cannabis at Water Tower Research.

The Motley Fool did some research and found that states without legal weed are leaving a lot of money on the table. The sad news is that much of the lost revenue in their thriving black markets is being concealed. Alabama could earn over $92 million per year, Mississippi over $47 million and Louisiana over $81 million. All three are among the poorest in the country. Kentucky, home to Senator Mitch McConnell, who has every chance of blocking legal marijuana, would make over $83 million.

California is a major concern due to high taxes and low enforcement. Legal cannabis businesses are being squeezed by illegal businesses that the state allows with little likelihood of punishment.

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A new map released by the U.S. Census Bureau details the share of marijuana tax dollars in state revenue, and in some cases the numbers are staggering.

Hopefully Congress will recognize that states are making money off the boom in cannabis users and push for federal legalization. This will help both medical marijuana patients and general customers.