States are addicted to cannabis tax revenues. According to a new report from New Frontier Data, states with legalized marijuana are on track to generate approximately $655 million in state taxes on retail sales in 2017. Within that tax figure, $559 million will come just from cannabis taxes, much more than from alcohol taxes.
The report also forecasts that tax revenues in states with legalized marijuana will reach $1.8 billion, of which $1.4 billion will be from cannabis specific taxes. This money isn’t easily replaceable if the Department of Justice reviews its current approach to marijuana. Plus, the Trump administration is calling for deep cuts in many programs with its proposed budget and this puts further pressure on state governors to continue providing services its residents have come to expect.
“In an era of dwindling state resources, when we are looking to smaller governments, and an administration at the federal level that is looking to end funding to states in numerous ways, the discovered revenue from regulated legal cannabis markets can be a lifesaver to local law enforcement, substance abuse counseling and other social services,” said Leslie Bocskor of Electrum Partners. According to Bocskor, states are fighting the Justice Department’s new war on drugs for purely fiscal reasons because the overall economic impact has been much higher than anyone expected. [Read more at Forbes]