Cannabis trade brings over $10bn in taxes to US states where adult use is legal
US states that have legalized the adult use of cannabis have collected $10.4 billion in taxes between sales beginning in 2014 and December 2021, according to a recent report by a pro-industry group.
A study released by the Marijuana Policy Project (MPP) earlier this month has described legalizing cannabis for adults as a “wise investment” that has given states a “new revenue stream to bolster budgets.” It adds that the $10.4 billion is not the final figure, as some states have not yet submitted totals for the last months of 2021. Almost one third of the total revenue was reported in 2021.
“States that have legalized cannabis for adults are reaping significant economic benefits,” said Karen O’Keefe, director of state policies at the MPP. She pointed out that in many instances revenue is reinvested in communities affected by drug use and by the war on drugs.
Global financial services provider Barclays PLC predicts that states could see cannabis tax revenue grow to $12 billion by 2030, exceeding that from alcohol.
“We’ll have some long lasting consequences of the pandemic and you’ll need to make money up somewhere,” Bloomberg quotes Mikhail Foux, Barclays’ head of municipal strategy, as saying.
The state of Illinois has already seen cannabis tax revenue outpace that from liquors. MarketWatch cites data from the state which suggests that adult-use cannabis generated some $193 million in tax revenue between July and November 2021, compared to just over $141 million over the same period for liquors including beer, wine, and spirits.
Eighteen US states have introduced laws that legalize, tax, and regulate cannabis for adults of 21 years of age and older. According to the MPP, some of the tax revenues are used for social services and programs, including funding education, school construction, early literacy, public libraries, behavioral health, and alcohol and drug treatment, among many others.
Use of cannabis for recreational, industrial, or medical purposes remains illegal on the federal level in the US in line with the Comprehensive Drug Abuse Prevention and Control Act of 1970. The federal government classifies marijuana in the most dangerous category defined under the law – along with heroin and cocaine – citing its high potential for abuse and little-to-no medical benefit.
In July last year, a preliminary draft of a new bill was introduced in the Senate to try and end federal cannabis prohibition.
For more stories on economy & finance visit RT’s business section