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How Much Tax Revenue Could Your State Make From Legal Marijuana?


Cannabis Cash

A new analysis at Nerd Wallet tries to provide a rough estimate of what every state could potentially earn per year directly from legal marijuana taxes. In the three places where legalization is on the ballot this November their estimates are:

Alaska – $11,513,846

District of Columbia – $8,769,904

Oregon – $54,558,596

Importantly, these are just broad estimates based on several conservative assumptions to provide a general idea about the short term. Predicting the exact size of the legal market and the price legal marijuana will sell for is very difficult.

For simplicity they looked at the possible revenue from a combined medical and recreational market. Their analysis also only looked at what would happen is all states adopted a 15 percent excise tax, but currently there are lower excise taxes in Colorado and Washington State. In addition the proposed excise taxes in the Oregon and Alaska ballot measures are based on weight not price, so depending on how much legal marijuana ends up selling for these excise taxes could end up lower or higher than 15 percent.

For comparison, an analysis of the actual legalization initiative in Oregon by ECONorthwest projected the recreational market alone would raise roughly $38.5 million but assumed current government revenue from the medical marijuana market will remain mostly unchanged.

This Nerd Wallet analysis does at least provide an interesting starting point for a discussion about the possible revenue in every state. You can look at their figures and fairly easily adjust them if you think the tax rate will be higher or the market will be smaller.

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How Much Tax Revenue Could Your State Make From Legal Marijuana?


Cannabis Cash

A new analysis at Nerd Wallet tries to provide a rough estimate of what every state could potentially earn per year directly from legal marijuana taxes. In the three places where legalization is on the ballot this November their estimates are:

Alaska – $11,513,846

District of Columbia – $8,769,904

Oregon – $54,558,596

Importantly, these are just broad estimates based on several conservative assumptions to provide a general idea about the short term. Predicting the exact size of the legal market and the price legal marijuana will sell for is very difficult.

For simplicity they looked at the possible revenue from a combined medical and recreational market. Their analysis also only looked at what would happen is all states adopted a 15 percent excise tax, but currently there are lower excise taxes in Colorado and Washington State. In addition the proposed excise taxes in the Oregon and Alaska ballot measures are based on weight not price, so depending on how much legal marijuana ends up selling for these excise taxes could end up lower or higher than 15 percent.

For comparison, an analysis of the actual legalization initiative in Oregon by ECONorthwest projected the recreational market alone would raise roughly $38.5 million but assumed current government revenue from the medical marijuana market will remain mostly unchanged.

This Nerd Wallet analysis does at least provide an interesting starting point for a discussion about the possible revenue in every state. You can look at their figures and fairly easily adjust them if you think the tax rate will be higher or the market will be smaller.

Jon Walker is the author of After Legalization: Understanding the future of marijuana policy, which is on sale this week for just $0.99!

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Jane Hamsher

Jane Hamsher

Jane is the founder of Firedoglake.com. Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.
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