Recreational marijuana stores in Arizona could generate roughly $480 million in revenue during the first full year of sales if the state legalizes adult-use cannabis in 2016, according to estimates in a new report by the nonpartisan Grand Canyon Institute.
A legalization proposal aiming for the 2016 ballot would establish a 15% sales tax on cannabis transactions. If the measure passes, the state would collect an estimated $72 million in taxes in 2019, when the new cannabis system would be fully up and running, according to the report.
The tax projection equates to nearly half a billion in sales.
The institute used Colorado as a basis for comparison, where marijuana sales – both recreational and medical – hit $700 million last year.
The study found that marijuana use in Arizona is only 75% of the level in Colorado. But as more states legalize recreational cannabis, the current stream of out-of-state visitors to Colorado and Washington State will likely drop. States such as Arizona, California and Nevada will likely wind up getting a good number of those visitors if they legalize recreational marijuana.
The Campaign to Regulate Marijuana Like Alcohol, which is behind a push to legalize recreational cannabis in Arizona next year, cheered the findings.
“Our conservative estimate of $40-plus million in revenue for schools turned out to be even more conservative than we thought,” campaign chair J.P. Holyoak said in a statement. “For decades, people have been exaggerating the potential harms of marijuana and downplaying the benefits of regulating and taxing it. We have no need to lie or exaggerate because the evidence is on our side.”