Yes — that is what Colorado is planning to do now after legalizing recreational marijuana last year. Voters approved a proposition to tax marijuana by a wide margin, 64 to 34 percent. The state of Washington also legalized recreational marijuana as well as the cities of Ferndale, Jackson and Lansing in Michigan and Portland in Maine.
Colorado Amendment 64 — establishes a system in which marijuana is regulated and taxed similar to how alcohol is regulated and taxed. The general assembly will be required to enact an excise tax of up to 15 percent on the wholesale sale of non-medical marijuana applied at the point of transfer from the cultivation facility to a retail store or product manufacturer. Amendment 64 will bolster Colorado’s economy with more than $120 million annually in new revenue and savings within the first five years and job creation.
According an economic analysis of Amendment 64 conducted by the Colorado Center on Law and Policy, passage of the initiative would:
- Result in $60 million annually in combined revenue and savings for state and local governments in Colorado, which could double to more than $100 million within the first five years of implementation.
- Save local and state law enforcement officials more than $12 million in the first year of operation.
- Generate $24 million annually in state revenue for the Building Excellent Schools Today (BEST) capital construction program.
- Create more than 350 new jobs, the majority of which will be in the construction industry.
Washington Initiative 502 — establishes a system very similar to Colorado’s Amendment 64 and applies an excise tax on each level of producer to a processor, processor to a retailer and retailer to a customer.
- Excise tax equal to 25 percent of the selling price on each sale between licensed producer and licensed processor — paid by the producer.
- Excise tax equal to 25 percent of the selling price on each sale of usable marijuana/marijuana infused product from a licensed processor to a licensed retailer — paid by the processor.
- Excise tax equal to 25 percent of the selling price on each licensed retail sale of usable marijuana/marijuana infused product — paid by the retailer.
- Estimates range anywhere between $0 and $2 billion dollars during the first five years.
Benefits of legalizing recreational marijuana are:
- The initiative will allow law enforcement to focus on violent and otherwise harmful crimes, as opposed to adults 21 and older who are simply possessing small amounts of marijuana.
- Regulating marijuana like alcohol will take marijuana sales out of the hands of cartels and criminals, and redirect that money toward legitimate, taxpaying businesses.
- Significant new tax revenue and job creation.
The debate of whether or not to legalize marijuana in the United States has been going on for decades. The NCPA had a compelling debate on it in 2010. Finally, two states are actually legalizing and taxing it. Will they succeed in proving that there is great benefit to legalizing and taxing marijuana? Do you think other states or the federal government will also join in?