Navigate

the bee news

Kingman

430E Beale Street
Kingman, AZ
(928)-361-0001
[email protected]

What we do?

News
Advertising
Marketing
Live Event Coverage

 

Marijuana Dollars & Cents

Written by Jim Hinckley

July 25, 2021

Reading Time: ( Word Count: )

As the country abandons decades of myth, propaganda and misunderstanding, Marijuana and related products have become more acceptable. A number of states now allow for the sale and possession of marijuana and some are expunging records of sentencing. And at the federal level there are proposals to dramatically alter the legality of possession or sale.

This has allowed for established of dispensaries such as The Bud Farmacy in Needles, California. It has also provided states with a strong new revenue source.

In Illinois, on January 1, 2020 recreational marijuana sales became legal. And the state began raking in up to 41.25% in taxes on some marijuana products. Then there were county and city taxes. And there was a 7% state wholesale tax. When combined, Illinois had some of the highest taxes on marijuana products in the country. It was recently reported that for calendar year 2020 the state derived $52,783,471 from these taxes.

As with regulation on marijuana and related products, and perceptions about its benefits or detriments, there is tremendous disparity on regulation as well as taxation. In stark comparison to Illinois, the total tax on recreational marijuana products in Michigan is a flat 16%. And yet in 2020 the state derived $288,183,493 from this tax.

Illinois is the only state to use a system of tiered taxation. So, as an example, there is 10% tax on products containing less than 35% THC. Products with more than 35% THC at 25%. But cannabis-infused edible products are taxed at 20%.

Further confusion is created with separate categories of taxation and regulation on marijuana for medical usage. And in 2020 the state expanded conditions for which a patient may be prescribed medical marijuana. As a result, an investigation found that some dispensaries in Chicago were providing customers with a list of cooperating doctors where they could get a medical card. This would allow them to avoid at least 25% of imposed taxes.

California leads the pack in regard to collection of taxes on recreational marijuana medical products. In 2019 that sate had approximately $3.1 billion of legal sales. This provided the state with $1,031,879,926 in tax revenues.

Tax revenues in other states is equally as impressive. In 2020 Colorado raked in $387,480,110. Washington state generated $469,200,000 in revenue during the same period, and Oregon added $133,150,349 to the states coffers.

 

Alaska makes for an interesting case study. Marijuana tax revenue is divided with 25% going to the general fund, 50% to the Department of Public Safety, Health and Social Services and the Department of Corrections, and 25% to a Marijuana Education Fund.

Revenues have shown a marked increase since 2017. In that year the state collected $1,749,497. Three years later, in 2020, that number had increased to $24,213,296.

As demonstrable evidence grows, states that have steadfastly resisted legalization of marijuana will be hard pressed to stand against the tide. Recently the Tax Foundation completed a study that estimated excise tax revenue in states with a market that has been operational for at least three years. Then using average excise tax figures and the estimated number of marijuana-using residents in each state they also estimated the potential for tax generated revenue by 2023. There is little doubt that these studies will encourage states to revaluate their positions.

 

You May Also Like…

Workforce Development Month

Workforce Development Month

Workforce Development Month HELPING INDIVIDUALS MEET THEIR PROFESSIONAL GOALS September is Workforce Development Month...

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

src="https://cdnjs.cloudflare.com/ajax/libs/reading-time/2.0.0/readingTime.min.js"