A report released by the Marijuana Policy Project shows that states that have legalized marijuana have taken in more than $10 billion in cannabis tax revenue since 2014. Those tax dollars are funding various programs. The $10 billion doesn’t include taxes from numerous other states with legal, medical marijuana sales.
Legalized cannabis has been a boon for many state budgets. During the fiscal year 2020-2021, California officials estimate the state collected approximately $817 million in adult-use marijuana tax revenue – a 55% increase over the revenue from the previous fiscal year. In Illinois, cannabis tax dollars generated almost $100 million more revenue from adult-use marijuana sales than from alcohol in 2021. In many cases, that newfound tax income from the state’s bong toking patrons goes toward needed public services and programs. States can reinvest in communities devastated by the “War On Drugs.”
The report highlights where some of this tax windfall is going in several states:
“This is in stark contrast to prohibition, which costs taxpayers billions of dollars each year to enforce,” said Karen O’Keefe, director of state policies at Marijuana Policy Project.
After an extended pandemic-driven economic downturn, the tax windfall couldn’t come at a better time.
“We’ll have some long-lasting consequences of the pandemic, and [states] need to make money up somewhere,” said Mikhail Foux, head of municipal strategy at Barclays.
While marijuana tax revenue might not be a panacea for state and local governments, it’s clear that its reaping benefits far beyond anything anyone anticipated when Colorado and Washington first legalized recreational-use marijuana in 2012.