Green Rush
Green Rush
Introduction
This past election decided more than just the presidential and Congressional races. Voters in Colorado, Washington and Massachusetts also approved measures that loosened the marijuana laws in their states, with the drug becoming essentially legal for recreational use under state law in Colorado and Washington, and legal for medicinal use in Massachusetts. Marijuana policies were on six statewide ballots this past November. Recreational use was the issue in Colorado, Washington and Oregon, while Arkansas and Massachusetts voters considered approving the drug for medicinal use. Although marijuana may not be the most favorable among the U.S., studies say it will become very profitable for the economy and government for years to come.
Government and Taxes
In Colorado, the passage of Amendment 64 means state residents over the age of 21 will soon be able to possess up to an ounce of marijuana without penalty, and will be able to buy it in licensed stores by the end of 2013. According to the Colorado Center on Law and Policy, the change could produce as much as $60 million in combined annual tax revenue and savings for the state budget. New excise tax receipts alone would total $24 million in the first year, according to the Colorado Center on Law and Policy’s analysis, plus $8.7 million in new state sales taxes and $14.5 million in new local sales taxes. For cash-strapped municipal governments, numbers like that are hard to ignore. According to a 2011 study of the 10 largest cities in Colorado, the only state for which data are available, medical marijuana sales generated nearly $10 million in annual tax revenues and Denver alone brought in $3 million on $82.2 million in gross sales. The Colorado capital is currently home to some 400 dispensaries and about 480 cultivation centers, and those businesses paid the city more than $6 million in license and application fees in 2011. Colorado’s numbers are a perfect example of how marijuana can become a very substantial tax resource for the government.
New Business Opportunities
Along with seeing substantial gains in tax revenues, the states that legalized marijuana will also see economic growth due to the introduction of an entirely new market and new business opportunities. Industry analysts are optimistic and foresee a creation of a new and highly profitable agricultural industry, increased trade opportunities, improved environmental conditions, and reduced costs with respect to enforcement of current laws. There are many who feel that the size of the marijuana market has the