Tax Money From Legal Cannabis Is Consistently Growing
Some states around the U.S. that have legalized recreational marijuana, have collectively made close to $8 billion in tax revenue. Which has been so since sales initially went legal back in 2014. This info was taken from the MMP who gathered the info on the matter. Furthermore, since then a great deal of innovation and progress has commenced for the cannabis industry.
The research evaluated the tax structure and revenue streams of all 18 states that have made recreational cannabis legal. However, there a 7 states where the sales have not started just yet. Overall, it reveals that building regulated marijuana markets gives states a constant and generally growing source of revenue. Which in turn can help aid various programs and services.
Back in 2020, states that have legalized recreational marijuana have generated $2.7 billion in taxes from cannabis sales. Also as more markets come online and others evolve, the overall full rec market is expected to continue to grow. For instance, in 2020 alone California brought in more than $1 billion in tax revenue from recreational marijuana. This made up a 62 percent increase from 2019.
Cannabis Tax Revenue Is Growing
One state that has been raising the bar with cannabis tax revenue is Illinois. This state has consistently been reaching higher monthly cannabis sales. This for the state has been happening since its legalized the adult use of cannabis program in January 2020. As well if the sales keep up, it could produce over $1 billion in tax revenue for 2021.
For the first time, marijuana taxes have reached higher numbers than those derived from alcohol in the state last quarter. Yet the report does not consider local tax revenue that individual districts may require on cannabis sales. For example states like Denver where residents pay an additional 5.5 percent tax. Which has lead to the state generating hundreds of thousands of dollars for the city.
“Legalizing cannabis for adults has proven to be a wise investment,” Jared Moffat, state campaigns manager at MPP, said in a press release. “Not only are states seeing the benefits of a regulated market and far fewer cannabis-related arrests—they’re benefitting in a direct, economic way, too.”
The Marijuana Policy Project also elaborated on various ways that recreational legal states are allocating those tax dollars.
Final Thoughts On Cannabis Revenue In The United States
In Colorado, $404.5 million in marijuana tax money has helped the state’s public school system. Oregon reinvests 40 percent of its money made from cannabis to public education. As well as 25 percent to finance mental health and other health programs. Plus in California, $100 million in cannabis tax money has been used to aid community groups that assist people who have been crucially impacted by punitive drug laws.
“Before legalization, money from cannabis sales flowed through an underground market that endangered public safety and disrupted communities. But now, we see all across the country that revenue from the legal cannabis industry is supporting schools, health care, and a range of other beneficial public programs,” Moffat said. “It’s no wonder that residents in legalization states overwhelmingly see legalization as a success.”
Those who support cannabis reform are not the only ones engaged in seeing progress with how states are addressing the tax side of marijuana legalization. The U.S. Census Bureau also has a goal to begin gathering and organizing information on revenue that states produce from legal cannabis sales. All in all the way the financial structure in the cannabis industry is growing and evolving.
Once the federal reform is enacted it may help move things along. As well as create a different system for the revenue made from legal cannabis. As mentioned above 7 states have yet to launch their cannabis market. But when they do it will add more value and money to the U.S. cannabis industry adding to the already high combined tax money that is generated.