Marijuana Profits Too Lucrative for Lawmakers to Ignore

Medical Marijuana

State lawmakers are increasingly embracing legal recreational pot, and there are several good reasons for this, from criminal justice reform to respect for individual rights and ending mass incarceration. However, for most, the most compelling reason to legalize is this figure: $793.6 million. That is how much just five states raked in from pot-related taxes and fees in only 2017.

This number is in a report from the National Cannabis Industry Association. Founded in 2010, the NCIA represents roughly 1,500 marijuana businesses in the pot industry nationwide. Most pot-legalizing rhetoric revolves around alcohol being more dangerous than weed, social justice issues caused by harsh drug laws, and more.

However, although these are strong and accurate arguments, they are not swaying lawmakers much. When it comes to actually convincing them to change their minds and legalize, money is and always has been the talk that changes everything. The cannabis economy is offering a massive windfall, but only where the law allows it. For this reason, state lawmakers now want to change the law.

Ambitious entrepreneurs are flourishing in the marijuana market. The pot economy offers opportunities to thrive in an already competitive environment. Despite this, the money that legal states are generating is what is really grabbing the attention of officials in most public offices across the United States. The NCIA reports staggering revenues. Rounded, the numbers for just five states are:

  • Alaska – $43.7 million
  • Colorado – $234 million
  • Nevada – $43.7 million
  • Oregon – $68.6 million
  • Washington – $441 million
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California also has legal weed laws, but since it only opened its pot market on January 1 this year, it is not in the report yet. The figure for Nevada is especially eye-catching because it only began regulating marijuana sales a year ago, in July 2017. For state governments desperate for revenues, nothing else short of burdening taxpayers with gargantuan increases can generate so much money so quickly.

One fact is certain: Governments have already increased taxes wherever possible to the absolute limit. Taxpayers simply cannot afford more taxes anywhere. Experts believe that the potential of marijuana tax revenues to promise a large and reliable new source of income for coffers is pushing more and more states to legalize, like New Hampshire legalizing state lottery in 1964 convinced others to join the fray.

Currently, only six states do not have a state lottery, namely Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah. Current forecasts of potential pot revenues are now energizing the push for legalization in other states. Talk is heating up, particularly last year in Illinois. Even the Chicago Tribune ran a piece opining that legalization would solve all of the state’s intractable budget problems.

Chicago voters will get the chance to approve recreational sales in November this year, but it is just an “advisory” question on the ballot. For legalization to happen, state lawmakers will need to act. If there is a majority “yes” vote on legalizing adult-use weed, it would give lawmakers sitting on the fence the political cover needed to move get the legalization ball rolling.

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Late last year, Pennsylvania’s Auditor General also made a public advocacy plea to legalize weed, stating that it would solve that state’s budget crisis too, with conservative estimates adding $200 million in new revenue to its coffers. Legalizing, regulating, and taxing cannabis for adult use is becoming an increasingly viable alternative for cash-strapped states, which is, in all honestly, just about all of them.

As always, the biggest obstacle is those state executives and lawmakers who led all of these states into a budget crisis in the first place. Voters who still remember promises made during the lure of state lotteries might have reason to remain skeptical about what cannabis tax dollars can achieve in changing laws. For broke state leaders, legalization is a path more and more consider, with some even walking.

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