Recreational Cannabis Has Produced Close To $8 Billion In Tax Revenue
Legal Cannabis States Almost Reach $8 Billion In Tax Revenue
Recreation Cannabis Sales Have Generated Billions In Tax Revenue In The U.S.
Now that marijuana stocks are starting to recover a bit better investors are still remaining cautious. The goal heading into June is to see cannabis stocks climb further back to higher market levels. With more cannabis companies releasing good earnings it’s contributing to the current rise in the sector. Looking past marijuana stocks the growth and progress of the cannabis industry is also helping some cannabis companies reach better gains.
In just the last year alone the U.S. cannabis industry hit a record-breaking $17.5 billion in legal cannabis sales. Much of this is due to legal states that have medical and recreational markets in place. Back in November when the height of this pandemic started a big increase in demand for cannabis overwhelmed the industry. However, the spike in cannabis sales back at that time, helped some cannabis companies report record-breaking earnings in 2020.
Also, a big contributor to this is more than half of the United States has some form of the legal cannabis market. The U.S. cannabis market has been a big focus amongst investors. This is due to the consistent growth and high revenue coming from that side of the sector. Many states with legal markets are looking for funding to start programs. As well as other ventures to further innovate the cannabis industry. The money to pay for all of this would be used from the tax money made from legal cannabis.
Tax Revenue From Recreational Cannabis Is Increasing In The U.S.
It seems like the money being made from legal cannabis is growing at a rate that may soon reach the levels of some of the bigger industries in the world. With more tax revenue being generated the more programs can be created. Which would help people and communities rebuild as well as promote social equity. Especially with each new state that legalizes marijuana which will add more to current tax revenue in the U.S. cannabis industry.
Recreational Marijuana Is Making Large Amounts Of Tax Revenue
Currently for states that have legalized the adult use of marijuana have all together made close to $8 billion in tax revenue. This number has accumulated since the sale of legal marijuana started back in 2014. Which was found by a report from the (MPP). The report conducted by the Marijuana Policy Project had a thorough look into the tax structure and ways of revenue from all 18 adult-use states. Yet not counting the current seven adult-use states that have not started to sell cannabis just yet.
Overall, it shows that creating regulated marijuana markets will provide states a steady and consistent source of revenue. Which would be able to fund different programs and services all from tax money made from legal cannabis. Back in 2020, states that legalized the adult use of cannabis generated $2.7 billion in taxes. Which was all made from cannabis sales in each state. Now as more markets take to the Ecom world this addition to the market is set to further grow.
For instance, California’s cannabis market made over $1 billion in tax revenue from recreational marijuana in the past year alone. This jump made for a 62 percent spike in comparison to 2019. One state that’s has been able to consistently out due its numbers is none other than Illinois. The state’s cannabis market has been breaking monthly cannabis sales records since its program started in January 2020. If Illinois keeps up these numbers, it could create upwards of $1 billion in tax revenue this year. For the first time, marijuana taxes outperformed the sale of alcohol in the state last quarter.
Final Thoughts On States Generating More Tax Revenue From Legal Cannabis
However, the above stats do not factor in local tax revenue that individual districts may force on cannabis sales. For instance states like Denver where residents spend an additional 5.5 percent tax. Because of this extra tax, it has produced over 6 figures for the city.
“Legalizing cannabis for adults has proven to be a wise investment,” Jared Moffat, state campaigns manager at MPP, said in a press release. “Not only are states seeing the benefits of a regulated market and far fewer cannabis-related arrests—they’re benefitting in a direct, economic way, too.”
MPP also broke down different ways that adult-use states are using those tax dollars. In Colorado, $404.5 million in marijuana tax revenue has supported the state’s public school system. Oregon invests 40 percent of its cannabis revenue to public education, as well as 25 percent to fund mental health and treatment programs. And in California, $100 million in cannabis tax dollars have gone to community groups to help people most impacted by punitive drug laws.
“Before legalization, money from cannabis sales flowed through an underground market that endangered public safety and disrupted communities. But now, we see all across the country that revenue from the legal cannabis industry is supporting schools, health care, and a range of other beneficial public programs,” Moffat said. “It’s no wonder that residents in legalization states overwhelmingly see legalization as a success.”
Those in support of cannabis reform are not the only ones interested in seeing how states are addressing tax revenue from legalizing cannabis. The U.S. Census Bureau is also preparing to gather and collect information on revenue that states generate from legal cannabis.