The annual tax revenue the United States stands to gain from cannabis legalization in all 50 states clocks in at over $ 3 billion. These numbers are in accordance with the personal finance website Nerdwallet. The figure could even be higher seeing as the amount has not taken into account the tax revenue garnered from the sale of legal marijuana, nor has is it accounted for reduced government expenditure in policing cannabis-related incidents.
Colorado’s Cannabis tax revenue
A mere three years after recreational cannabis was legalized in Colorado, the State reported an estimated $150 million from cannabis tax revenue. The numbers had literally doubled from the previous year (2014) where the state collected $70 million in marijuana tax revenue. Colorado hit yet another milestone by garnering $500 million in cannabis tax revenue as of May 31, 2017. This was in accordance with a report tabled by VS strategies. If these numbers are any indication, we can rightly conclude that cannabis legalization has created up a lucrative revenue stream.
Nevada’s Cannabis revenue
Nevada made an astonishing milestone in marijuana sales just four days into the legalization of recreational marijuana. The state accumulated close to $500,000 in tax revenue and $3 million in sales revenue. You will be hard-pressed to find such numbers in any other industry in the State.
6.7 Billion Cannabis Sales
In 2016, North America recorded an unparalleled growth in the sales of cannabis. The revenue clocked in at $6.7 Billion which was a whopping 30% increase from the previous year. This number can be largely attributed to the expansion of the legal markets in the United States and Canada. The sales are expected to hit the fan should this pace continue. Assuming an annual growth rate of 25%, revenue collected from the sale of marijuana in North America will come in at $20.2 billion by 2021.
As you may have guessed, the growth of this industry is just at its infancy levels. This is due to legal hurdles, biased stereotypical views about cannabis, and the young age of the industry.
To put this in perspective, the editor in chief of ArcView (a well-respected research company) admitted that the revenue collected from cannabis sales is unprecedented. Tom Adams said and, “The only consumer industry categories I’ve seen reach $5 billion in annual spending and then post anything like 25% compound annual growth in the next five years are cable television (19%) in the 1990s and the broadband internet (29%) in the 2000s.” Going by this, cannabis sales have surpassed both broadband internet and cable television with their 30% increase reported just over the span of one year.
Income from cannabis sales aside, Cannabis can also bring in extra revenue in a different way. Jeffrey Miron, a Harvard economist, estimates that the United States could rake in close $8 billion annually thanks to Marijuana legalization. This is the amount used to house prisoners jailed for weed-related crimes, as well as the police manpower dedicated to marijuana crimes. What’s more, the revenue saved can be repurposed to solving and stopping major crimes such as burglary, assault, and more.