With marijuana now legal in Colorado and Washington, state lawmakers are looking to tax sales of the formerly prohibited substance.
Tax revenue from marijuana sales has been a talking point for legalization advocates for years. Now that voters are moving in their direction, state officials say taxing marijuana sales could fund schools and other public services. One Colorado state representative says that taxing marijuana sales could fatten state coffers by up to $100 million a year, Politico notes.
Of course, coming up with reliable numbers is difficult since the true extent of marijuana sales in unknown. Adding to that, legalization will likely drive prices down — possibly as much as 85% — as fear of arrest and confiscation abate.
A pro-legalization group in California estimates that the state see a minimum of $1.2 billion in revenue, if marijuana is legalized and taxed there.
Not everyone agrees with this rosy view. Even a pro-legalization Harvard economist contends that tax revenue estimates have been inflated by the legalization movement. If marijuana was legalized and taxed across the entire country, the economist forecasts tax revenue of $6.4 billion, with the lion’s share going to the federal government.
Legalizing medical marijuana use across the U.S. could also provide a financial windfall for pharmaceutical companies, who are already investigating medical uses for pot.