Marijuana Tax Considered; Could Generate Billions In Revenue For Colorado, Washington And States Which Legalize Recreational Pot Use
In Colorado and Washington, states that legalized the recreational use of marijuana, lawmakers are keen on passing a tax on the drug in the hopes that it could be a major money-maker and help offset budgetary shortfalls.
Rep. Jared Polis, a Colorado Democrat who is pushing to pass federal legalization through Congress, told Politico "I've seen some estimates in the high tens of millions, as much as $100 million" in Colorado annually.
According to some analysts, forecasts of up to hundreds of millions or even in the billions in revenue could come from a cannabis tax.
Polis suggests that the financial windfall from a tax could help put a "substantial dent in needed school improvements, particularly in poorer districts."
The Colorado Congressman prefaced his remarks by cautioning that decisions regarding a potential pot tax should not be made too quickly or without due diligence.
A rush to push through a marijuana tax could cause pot smokers back onto the unregulated black market for cheaper weed if they find the cost to be prohibitive.
"You have to know more about the structure of the demand curve, which we don't have any data on because this is black-market; it's all conjecture," said Rosalie Liccardo Pacula, the co-director of the RAND Drug Policy Research Center.
Dale Gieringer, director of the California National Organization for the Reform of Marijuana Laws, estimated that legalizing marijuana would rake in revenues of at least $1.2 billion to California. Under Gieringer's study, he assumes that legalized marijuana transactions would receive a traditional sales tax as well as an additional $50 levy per ounce of marijuana purchased, according to Politico.
Some, however, are skeptical about such projections, and believe they are far too optimistic.
Jeffrey Miron, a pro-legalization scholar at Cato Institute, warned those who believe a marijuana tax would provide a major cash cow and suggested that Gieringer's figures were approximately three times higher than his estimate.
Miron believes tax of legalized marijuana nationwide which was similar to that of alcohol or tobacco would generate nearly $6.5 billion in tax revenue with about $2 billion going to the states and $4.3 billion for the federal government.
