Marijuana Legalization Brings Potential Increase in Tax Dollars

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On November 4, several states, at least 17 municipalities, and one U.S. territory will vote on drug policy reform. The legalization of marijuana will result in a significant increase in tax revenue amounting to millions of dollars.

Studies show that when states such as Alaska, Florida, Oregon, and Washington, D.C. are combined, a conservative estimate of up to $3 billion in marijuana tax revenue could be made. The state of California has the most to gain in terms of marijuana sales taxes, potentially generating over $519 million in one year—almost the entire California Department of Parks and Recreation budget for 2013.

Portland’s city council has been meeting to determine whether or not to join 17 other Oregon cities in preemptively putting a tax on marijuana. According to sales and revenue forecasts, Portland could make anywhere from $1.7 million to $4 million annually if the city council proceeds with their proposed plan to place a 10 percent tax on recreational marijuana. The city council, however, unanimously decided against placing a 5 percent tax on medical marijuana.

Colorado, the first state in the U.S. to legalize the sale of recreational marijuana, is expected to generate $60 million to $70 million in taxes of marijuana sales this year. In the first half of 2014, Colorado has already raked in over $25 million in taxes.

Some of the top states hoping to legalize marijuana this November include Alaska, Oregon, and Florida.

If Alaska’s Measure 2 is passed, it will become the first red state to have full marijuana legalization. The statewide marijuana legalization initiative is closely based on Colorado’s Amendment 64 and contains many elements in Oregon’s potential law.

This year, Florida’s Amendment 2 is the only statewide medical marijuana initiative on the ballot. Its passage would make it the first southern state in the country to adopt a medical marijuana law.

The passage of Measure 91 in Oregon will make it the third state in the country to outright legalize marijuana for adults. This initiative will legalize possession of marijuana in small amounts for individuals 21 years and above, as well as create a system to regulate production and sales of marijuana statewide. Measure 91 will also allow adults to cultivate small amounts of marijuana under specific circumstances.

Earlier this year, the District of Columbia adopted a marijuana decriminalization law. Initiative 71, however, will legalize the cultivation and possession of marijuana in small amounts.

The U.S. Territory of Guam will be voting on the reforming or repealing of laws on marijuana that would permit dispensaries to be regulated by the Department of Public Health and Social Services.

 

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