Report: Marijuana Legalization Could Yield $28B in Tax Revenues

The marijuana industry could generate up to $28 billion in tax revenues for federal, state and local governments if Uncle Sam legalized cannabis, according to a report from the nonprofit Tax Foundation.

The conservative-leaning organization estimates revenues would include $7 billion for federal coffers, $5.5 billion in business taxes, and $1.5 billion in income and payroll taxes.

However, tax revenues are later forecast to decline to $22 billion as more players jump into the industry. The larger number of business would erode profit margins, leading to a reduced tax haul, the report said.

The report estimates the current size of the marijuana market in the United States total $45 billion per year – or about 0.28% of gross domestic product – based on consumption of about 26 million pounds of marijuana per year.

Business owners currently in the marijuana industry require profit margins of 100% or more because of the high risk of imprisonment, confiscation of capital, and unenforceable contracts, according to the report.

The report also found that if all states legalized and taxed marijuana, states could collectively expect to raise between $5 billion and $18 billion per year.

Colorado tax collections in 2016 will surpass $140 million, more than double the roughly $70 million in annual cannabis taxes the state originally anticipated, according to a separate report from the Tax Foundation. In Washington State, marijuana sales are now averaging more than $2 million a day, and could generate up to $270 million per year.

3 comments on “Report: Marijuana Legalization Could Yield $28B in Tax Revenues
  1. Seth Tyrssen on

    Nooo, the feds would rather put the squeeze on waitresses for their tips, and little old ladies for their Social Security (I’ve personally seen both done) than get a hassle-free 28 billion. Oh well. They’d only piss it all down a black hole anyway (over 8 BILLION per year goes to the CIA alone, for mysterious “black projects.”)

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  2. Quaxmercy on

    It is NOT about tax revenue! It IS about the healthcare savings, the preventative benefits, the positive environmental impacts, & the jobs, jobs, jobs!

    Reply
  3. Silverado on

    What’s a few billion loose dollars to those that can print money in any amount they want at any time they want? It’s more about controlling YOU as opposed to any kind of tax windfall for the crooked govt. They’d just make something that goes bang instead of anything that the public could actually gain or benefit from. There’s plenty of money for neocon war games all over the world but there’s nothing like less expensive medical insurance, good schools or even an increase in the interest rate at banks for savers. These criminals belong in jail for what they’ve done to this country and keeping cannabis illegal and the jails full are but more of their criminal games they’ve been playing now for decades.

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