As the country wrestles in the throes of the debate on marijuana legalization, politicians and advocates alike have been professing the tax boon marijuana sales would likely generate.
Arizona’s marijuana sales jumped 50 percent in 2017, matching a nearly proportionate increase in marijuana patients, according to the Arizona Department of Health Services’ year-end report.
Those 150,000 patients purchased a total of just over 43 tons last years. With an estimated price of $250 per ounce, and an average tax rate of 9 percent, those sales generated nearly $32 million for the state of Arizona, or about 10 percent of the state’s K-12 spending. The Arizona Joint Legislative Budget Committee estimated a yearly revenue of $123 million when Prop 205 was on the ballot in late 2016. States across the country post first-year revenue numbers in the ballpark of $30 million to $40 million after legalization . California alone plans on bringing in $1 billion in marijuana tax revenue in the next year.
Aside from overstated impacts of increased policing and healthcare costs, which would quickly dissipate as marijuana becomes more integrated in our society, marijuana stands to be a major source of revenue for our country.
Rep. Ro Khanna (D-California) recently estimated national legalization could provide as much as $7 billion in yearly revenue for the U.S. However, that estimate seems conservative after looking at the proposed $132 billion in revenue according to marijuana analytics firm New Frontier Data.
Coupled with decreases in costs related to the war on drugs and incarcerating those with marijuana offenses, and the country stands to see a lot of cash free up by both saving money and increasing revenue. There’s another upside in allowing the marijuana industry to grow into full bloom, per New Frontier Data’s report. As a brand new industry, new marijuana businesses could employ millions of new workers, helping to fill in the gaps of structural unemployment.
It doesn’t take much training to sling pot. Additionally, the revenue generated from income taxes by millions of new workers making tens of thousands of dollars a year wouldn’t hurt the nation’s budget, either.
One issue arises in legal marijuana states where politicians are concerned that steep taxes will only send people back to the black market.
Since marijuana tends to be an inelastic product for regular users, they could choose to return to cheaper sources.
On the other hand, that also means users would be more willing to pay a higher price for their substance of choice. Those who use less regularly may give it up all together, but it’s unlikely new users would turn to an unknown black market for a new craze.
Then again, you don’t see people texting their hookups for moonshine when the bar is selling $15 cocktails. In fact, it was prohibition that created alcohol’s black market, however brief.
If history isn’t our guide, then hopefully the balance sheets will be.
No matter on which side of the aisle members of Congress sit, we can all get behind the idea of bolstering the national budget.
If our representatives don’t hear that, then we have issues beyond marijuana legalization.
This article appears in Feb 1-7, 2018.
“If our representatives don’t hear that, then we have issues beyond marijuana legalization.”
Indeed, this has always been the hang-up. Those issues are exemplified by our current Attorney General, namely, unrelenting ignorance and bigotry based on the misinformation and outright racism from which marijuana prohibition sprang in the 1930’s. His pronouncement that, “Good people don’t use marijuana,” still resonates among law makers to the extent that even though legalization is spreading, it still involves unnecessary restrictions and costs to users. Despite abundantly clear evidence, the new laws reflect a lack of acceptance among legislators that marijuana is dramatically less harmful than alcohol or tobacco. Yet, they see no problem with those toxic products being available at every corner market.
What a pant load on 10% of K>12 funding is now 5 billion not 500 million about 1.5 %. The schools need to be financed through the legislature. If any dime of my money collected in marijuana tax is spent through some quasi ghost government. I will go back to street, as the East Coast is legalizing intelligently (Vermont) the market demand there is becoming less for Mexican swag means more on the street throughout the US.
The very Idea that the contributions for police and oversight would diminish over time as it became acceptable is absurd. Born at night just not last night. Like Indian gaming that give so much to programs that help the citizens paramedics counseling etc.etc.
The monies that are contributed from Indian gaming on a sliding scale mind you and dont allow audits. The totals of Indian gaming dont match what the county pays for in emergency services, erosion control, Civil Engineering, Roads & their maintenance plus the res charges a trespass fee (gov to gov) for crossing the res. Plus the loss of sale tax revenue is about 5 million. Whats the loss to entertainment loss dollars taken from Civic arenas. Just look at how many districts are funded primarily from property tax. Indians dont pay property tax but get the benefits well the governing agency does from there is a mystery.
What prop 205 intended to do was circumvent the whole of the State Government set of governing on their own. Have their own Department with their police, court, banking system. Then some quasi non-binding citizens board made up of BS civic leaders to represent the populace to the commission CHA CHING. Once these civic minions hanging around like fish on the chum get entrenched to handing out monies. It will be never ending and the legislature would be happy to say that is a Department of Marijuana problem let them manage let them pay.
How absolutely ignorant this topic is that the enforcement, whimsical related hypothesis of substance abuse of all kinds now related and the burden of tax on marijuana. Damn just look at the Opioid crisis I dont know any oxy or fentanyl addicted that started on Marijuana but on prescription abuse. Let me say if the Marijuana dollars are tapped and siphon off to make other programs legit, quite simple then they are NOT.
I say it would probably be in the marijuana consumers interest. Try and establish a street dealer and make contacts hedge your supply opportunities it would be in your interest if you just got 25% of your consumption it will make a ripple in funding to this bullshit 205 vestiges
You want to do legalization right look towards Vermont the newest of cutting edge legislation towards legalization. REPEAL SCHEDULE ONE
Since we brought up this taxation to finance. Lets take a look at pending legislative action. We have Farnsworth (mesa) looking for 5 million of marijuana dollars to go to police to combat trafficking. Of what the minds is to ponder there are no parameters to the bill. Maybe investigate trafficking of knockoff Coach purses at the swap meet, maybe trafficking in stolen first run movies or the like, Or could it be in trafficking in stolen auto parts. Trafficking in child porn illegal cigarettes or stampeded Alcohol. Just where does the term TRAFFICKING start and stop. Yea investing in the government to be forthright with that is like, “Step right up take a spin on the trafficking wheel, first your money then you clothes after that nobody knows”
prop 205 would of allowed all billing for trafficking saying glad to support marijuana in a positive way here is some monies for that. More things added to the trafficking more taxation needed.
lets move on to Sen Borrelli SB-1420 requirement to test all medical marijuana for contaminated and maintain proper labeling. For this he is asking for 2 million from the marijuana dollars to set up standards with the AZ dept of Ag. This is more than reasonable till you read what they are going to test for contaminates and mold, Then if found to be contaminated it is delivered back to the producer/grower so it can blend it down to less parts per million. If moldy then the whole has to be destroyed not returned. If it is contaminated do you want it then rendered down to an oil where you can mix and blend till it passes ? NO!
If they cant get it right by now quit
To add insult chemicals used in manufacture must be displayed on label warnings to health, but no where does it state how much potency is in the product it is with Alcohol. No just some LEAFY dribble of what that strain tested some place by somebody someplace, in some place of time yea BS if not lab tested for strength it is a guess.
Then get to the licensing of the labs all will be independent 3rd party to the production of marijuana I have a feeling that these will try to if not already lobbied the legislature to become distributors this can’t happen as it would be a huge conflict of interest.
There should be no limiting of licensing labs that can test if state qualified. There should be no consideration for capitalization of lab set up or operations. Considered as it will become a cost per weight across the board. All labs should be completely independent of any marijuana business in associations, family, or employment. All labs will be completely off site from any other marijuana production processing, distribution, sales.
Don Shooter is Gone that looks up for us, he was the one that stole budgets in 2010. Was a huge vocal opponent against Medical MMJ and wanted to raid the coffers.
Wanted to read this part where the cost to charge the tax on a sliding scale depending use supply and social embracement.
Wow what a genius concept and this WILL work. Because all marijuana users are of the same ilk education employment lifestyle. Just one big bag social needy whinny druggy citizens that the government needs to manage, and this vehicle if legalized can and will do that.
People in the store front of the sale of marijuana referred to as a pot slinger “dont take much to be”. Now we have the face of waitress @ Hobo House is a hash slinger, Landscaper as a weed puller/dirtraker, mechanic a tool wrencher.
See the point even this story quantifies all users to their lowest part of society. Diminished return of helping a patient this is just a bottle neck to collect by happenstance to be agents of the man.
ADA has overgrown it’s need existence or reason with profiling like this. I am not nor will be the fish on the hook. For that is the need to tax and burden the bag of social misfits. As it becomes more socially acceptable F–k they just want a bigger bag DUH !