Profiting From Marijuana
Marijuana legalization is a very divisive topic in the United States. One aspect that both sides can agree on is the potential tax revenue to be gained by legalizing recreational use. But how much tax revenue are we talking about?
A recent article in Forbes magazine reported that ten states now have legalized pot sales, as well as Washington D.C. Seven currently tax and regulate revenue-generating stores. Taxes typically total 10% to 37% more than local sales taxes making legalization attractive to state coffers. For example, Washington, California, and Colorado took in an estimated $319 million, $300 million, and $266 million, respectively.
For these states, where does the extra money go? The answer is a wide and varied range of activities. For Colorado, which legalized first, marijuana revenues are going toward school construction, drug abuse programs, and medical research. As examples, Aurora, CO used $900,000 to open up a space for the homeless, plus access to basic services. Pueblo, CO funded scholarships for underprivileged students.
Unfortunately, it is way too early to know and understand the possible societal costs of legalization. Reliable data is likely years away. The “carrot” of additional revenues is simply too great for the politicians to resist as more and more states look toward legalization.