During the Presidential elections in November 2020, several other decisions were also made at the polls. And one of them was the future of legal cannabis in one form or the other.
It’s all about taking a leaf out of the books of Washington and Colorado and four more states – Arizona, Montana, South Dakota, and New Jersey. These states have made marijuana consumption legal for recreational purposes. Mississippi also did the same along with other states, but why?
The marijuana markets
This market is worth billions, and its total market demand is over USD 60 billion. And with this number in mind, from a tax policy perspective, legalizing marijuana stocks has a massive incentive. It will bring in sales of over USD 60 billion into the legal arena and a new revenue stream.
Excise tax is not a tool to raise funds. But sales and property taxes and income tax on newly formed businesses can provide meaningful revenue for local and state governments.
Impact on tax revenue
Marijuana seeds for sale and plant sales in Washington and Colorado have improved in the past few years. In 2019 Colorado collected over USD 302 million in fees and taxes on recreational and medical Marijuana.
The sales were more than USD 1.7 billion. The titles sales in the US were USD 12.2 billion, and an increase of up to USD 31.1 billion is expected till 2024.
According to a study by Colorado State University and Pueblo’s Institute of Cannabis Research, over USD 80 million was contributed by this industry to the local economy in 2017. A very similar situation is in California and Massachusetts. And they don’t have to learn from scratch. They can already learn a few things from the states that have legalized Marijuana and move ahead with some modifications in the policies.