Legal marijuana offers small state tax revenue boost: Moody’s

May 8, 2018
AggregatedNews
Policy & Legal
2 Comments

SAN FRANCISCO (Reuters) – Tax revenue from recreational marijuana makes up a small percentage of annual general fund revenues in states with the most established retail markets, such as Colorado, Washington and Oregon, Moody’s Investors Service said on Tuesday.The boost in tax revenues is marginally credit positive in states with a nascent legalized weed industry, the rating agency said, including in larger states like California.

Cities and counties are more likely to see a bigger impact from local marijuana taxes because of their relative size, Moody’s found. Some municipalities have prohibited local retail marijuana sales, in order to avoid the potential strain on law enforcement.

Twenty-nine states nationwide have legalized some form of marijuana. Nine states permit recreational use. Canada is planning to legalize weed later this year.

Colorado and Washington, two states with the most established retail weed industries, offer examples of how tax revenues can quickly ramp up in the years after legalization. Both states now anticipate collecting hundreds of millions of weed-related tax revenues annually. But ultimately that makes up 2 percent or less of the states’ total general fund revenues. [Read more @Reuters]

This Post Has 2 Comments

MFB says:

May 10, 2018 at 11:37 am

And they will continue not to achieve the tax revenues while more and more cannabis businesses go back underground. EXCESSIVE over-regulation and taxation has decimated the marketplace in California. Farms for sale everywhere!

Reply
Joe Bailey says:

May 15, 2018 at 5:53 pm

It is a shame that all of these regulating bodies are stifling the industry with heavy taxes and regulations. IRS 280E is bad enough on cannabis companies, something I unfortunately have to remind people on a daily basis as a CPA in cannabis, but people often forget about the OTHER taxes that stifle the industry. Sales taxes can kill a market, ask Washington State.

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