Buds $3 Billion Taxable Treasure Chest?
We've all heard the saying 'money doesn't grow on trees,' which still (to this very day) sadly remains true. However, apparently it does grow on marijuana plants, surprisingly enough. If all 50 states legalized cannabis today, they'd be be collectively raking in more than $3 billion a year in taxes alone.
Now you might be wondering, where the hell did this gargantuan figure suddenly arise from? Well the answer my friends is NerdWallet. NerdWallet is a personal finance site, who forecasted a total of $3.1 billion annual windfall for state governments that legalized marijuana.
Providing a state by state economic analysis, the researcher seemingly dissected each and every piece of existing data available to them - taking into account marijuana use rates (for those aged 25 and older), cannabis market size as well as state and local tax rates. From their research they deduced that California would gain the most from legalization. They projected that the golden state would generate more than $519 million per year, while the big apple (New York) coming in in second would snag $248 million - not bad for a runner up aye? Other top tax generating giants included Florida, Texas and Illinois of all which are expected to make over $100 million annually.
Basing their figures on a 15% flat rate of tax (presently imposed in Colorado), NerdWallet went on to add state and local taxes to that figure. The site didn't however, subtract medical marijuana tax revenues in the 23 states that allow medicinal marijuana use. In addition to this oversight, they didn't calculate reduced government spending on law enforcement, which one would assume would have a substantial effect upon the overall figures (positively of course).
Utilising the Substance Abuse and Mental Health Services Administration's National Surveys on Drug Use and Health, NerdWallet were therefore able to more accurately estimate marijuana sales from each state, this also in turn allowed them to find out the number of marijuana smokers aged 25 and older. NerdWallet calculated the approximate number of pot users in each state, and applied the percentage to the U.S. population - estimating the total marijuana market worth at a staggering $14 billion.
NerdWallet's blanket tax assumption of 15% (realistically speaking) wouldn't necessarily tally correctly. This is because tax rates already vary wildly from state to state. However with that being said the legalisation of marijuana would still undoubtedly prove to be a lucrative one.
With so much to potentially gain from marijuana legalization, it appears to be a bit of a no brainer. That being said, the $3 billion question still remains and that is ... will all 50 states legalize cannabis?