Cannabis supporters have often used tax revenue from marijuana sales as part of the argument for making it legal. Now that a number of states have legalized marijuana, the numbers show that marijuana sales are a major game-changer.
Data is starting to come in on the first states to legalize marijuana, and the results are impressive. More than $200 million in tax revenue have come from Colorado and Washington already, and the states are putting that money to good use.
Tax Revenue from Marijuana Sales Surpasses Alcohol in Colorado
After being legal for about a year and a half, medical and recreational marijuana already brought in $117 million in tax revenue as of August 2015, according to the Colorado Department of Revenue.
From July 1, 2014 through June 30, 2015, Colorado earned almost $70 million in tax revenue from marijuana, compared to almost $42 million in tax revenue from alcohol. The state earned so much from marijuana taxes that they had to initiate a marijuana tax holiday because of their state’s tax structure. Colorado waived taxes for some marijuana transactions on September 16, costing them about $3 million to $4 million in revenue.
Mason Tvert, director of communications for the Marijuana Policy Project, pointed out in a statement that other states are missing out on a really helpful revenue stream.
“It’s crazy how much revenue our state used to flush down the drain by forcing marijuana sales into the underground market,” he said. “It’s even crazier that so many states are still doing it. Tax revenue is just one of many good reasons to replace marijuana prohibition with a system of regulation.”
Washington Collected About $83 Million in Tax Revenue from Marijuana Sales in Just Over a Year
Washington did not start to officially sell legal marijuana until July of 2014. By August 2015, the state had already made about $83 million in tax revenue from marijuana, according to the Washington State Liquor and Cannabis Board.
The state is using that money for a number of causes, like education, but they are also allocating some of the funds for further study of marijuana. About $8 million is being used on different studies, from medicinal applications to the short- and long-term effects of marijuana legalization.
Legalizing Marijuana Could Lead to Billions in Tax Revenue
As additional states explore the legalization of marijuana, the data regarding tax revenue can be a major influencer. The Cato Institute, a libertarian think tank, believes that federal marijuana legalization could have a massive tax benefit.
Their 2010 study on the subject concluded that marijuana legalization could lead to $8.7 billion a year in federal and state tax revenue, assuming that marijuana would be taxed in a similar manner to alcohol and tobacco.
With new states looking into changes in marijuana legislation, this tax data and all of the good coming from the revenue stream can have a serious impact in changing views on legalizing cannabis.