The Green Rush could turn into a Revenue Gold Rush for more States

tax money

Colorado recently published its tax revenue figures for the month of August. Recreational Cannabis sales continue to increase in the Centennial state. Based on these tax figures, we can see that from January to August, recreational Cannabis sales rose from $14.02 million to $33.07 million — revenue more than doubled over this short time period. Looks like Colorado citizens needed a little bit of time to adjust to the new law and the supply to catch up to demand.

As time goes on, legalization may just become the new norm. Recreational legalization is taking millions of dollars out of the pockets of black-market drug dealers and placed it into the legal economy. Washington and Oregon have already made the decision to go legal, and other states may very well follow suit. Here are the states that can financially benefit the most from legalizing Cannabis. These numbers are based on a NerdWallet report, marijuana use data from the Substance Abuse and Mental Health Services Administration (SAMHSA), and other resources.

**The NerdWallet report determined each state’s tax rate by adding a 15% excise tax to state and local tax figures compiled by the Tax Foundation. The report found each state’s market size by determining what portion of the $14 billion total Cannabis market each state would theoretically encompass. This is based on how many marijuana users (expressed as a percentage) are in that particular state. Numbers are rounded.

Here are the seven states that could gain the most:

  1. California: Population ages 25 and older: 24.78 million.     Percent of population 25 and older who have used marijuana in the past month: 6.74%.     Number of marijuana users: 1.67 million.     State’s portion of the marijuana market: 15.84%.     Marijuana market size: $2.2 billion.     Tax rate (state and local sales taxes combined) plus excise tax of 15%: 23.41%.     Potential revenue from sales and excise taxes: $519.3 million.     Illicit drug use percentage: 8.68% to 9.35%. (Current marijuana Status: medical legal)
  2. New York: Population ages 25 and older: 13.31 million.   Percent of population 25 and older who have used marijuana in the past month: 5.98%.     Number of marijuana users: 795,924.     State’s portion of the marijuana market: 7.55%.     Marijuana market size: approximately $1 billion.     Tax rate (state and local sales taxes combined) plus excise tax of 15%: 23.47%.     Potential revenue from sales and excise taxes: $248.1 million.     Illicit drug use percentage: 8.68% to 9.35%. (Current marijuana Status: medical legal)
  3. Florida: Population ages 25 and older: 13.5 million.     Percent of population 25 and older who have used marijuana in the past month: 4.73%.    Number of marijuana users: 638,727.     State’s portion of the marijuana market: 6.06%.     Marijuana market size: $848.33 million.     Tax rate (state and local sales taxes combined) plus excise tax of 15%: 21.62%.     Potential revenue from sales and excise taxes: $183.4 million.     Illicit drug use percentage: 7.39% to 8.67%. (Current marijuana Status: illegal)
  4. Texas: Population ages 25 and older: 16.4 million.     Percent of population 25 and older who have used marijuana in the past month: 3.30%.     Number of marijuana users: 540,883.     State’s portion of the marijuana market: 5.13%.     Marijuana market size: $718.4 million.     Tax rate (state and local sales taxes combined) plus excise tax of 15%: 23.15%.     Potential revenue from sales and excise taxes: $166.3 million.     Illicit drug use percentage: 4.08% to 6.70%. (Current marijuana Status: illegal)
  5. Illinois: Population ages 25 and older: 8.56 million.     Percent of population 25 and older who have used marijuana in the past month: 4.79%.     Number of marijuana users: 409,971.     State’s portion of the marijuana market: 3.89%.     Marijuana market size: $544.5 million.     Tax rate (state and local sales taxes combined) plus excise tax of 15%: 23.16%.     Potential revenue from sales and excise taxes: $126.1 million.     Illicit drug use percentage: 6.71% to 7.38%. (Current marijuana Status: medical legal)
  6. Ohio: Population ages 25 and older: 7.8 million.     Percent of population 25 and older who have used marijuana in the past month: 5.39%.     Number of marijuana users: 418,842.     State’s portion of the marijuana market: 3.97%.     Marijuana market size: $556.3 million.   Tax rate (state and local sales taxes combined) plus excise tax of 15%: 22.11%.     Potential revenue from sales and excise taxes: $123 million.   Illicit drug use percentage: 7.39% to 8.67%. (Current marijuana Status: illegal)
  7. Michigan: Population ages 25 and older: 6.62 million.     Percent of population 25 and older who have used marijuana in the past month: 6.61%.     Number of marijuana users: 437,649.     State’s portion of the marijuana market: 4.15%.     Marijuana market size: $581.27 million.     Tax rate (state and local sales taxes combined) plus excise tax of 15%: 21%.     Potential annual revenue from sales and excise taxes: $122.1 million.     Illicit drug use percentage (among persons ages 12 and older): 8.68% to 9.35%.    (Current marijuana Status: medical legal)

 

Looks like all the stars are aligned for 2016 Cannabis legalization in California. The Examiner looks at this possibility as a good step forward. However, many in this area might feel just the opposite, for moral or monetary reasons. The next couple years could really shake things up behind the Redwood Curtain.

the rest of the states:

tax break down

 info from WallStreet CheatSheet

 

 

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2 thoughts on “The Green Rush could turn into a Revenue Gold Rush for more States

  1. I think the black market will stay around in some form, it will just be downsized and have to diversify.

    Like

  2. Remember, if you can’t grow your own, outdoors in the sun, IT ISN’T LEGAL. No matter how it gets dressed up.

    Like

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