Several cash-strapped states are eyeballing a tax on marijuana following initiatives legalizing the substance in Washington and Colorado.
“I’ve seen some estimates in the high tens of millions, as much as $100 million for [Colorado],” Rep. Jared Polis (D-Colo.), who is supporting federal legislation to legalize and tax marijuana in the U.S. Congress, told Politico.
He said that applied across the United States, revenue derived from the tax could go a long way, including a “substantial dent in needed school improvements, particularly in poorer districts.”
Both Colorado and Washington are trying to figure out how to tax recreational marijuana use after legalizing the plant. In Washington, lawmakers are looking to tax “all trademarks, trade names, brand names, patents and copyrights related to marijuana,” according to The Week magazine. Washington also wants to levy a 25 percent tax on marijuana retail stores and growers.
The overall revenue generated from the taxes could bring in an extra $565 million in 2017.
The magazine also said Colorado is looking at a 15 percent tax on wholesale marijuana purchases for businesses as well as a 25 percent tax of individual consumers.
Dale Gieringer, the head of California National Organization for the Reform of Marijuana Laws, told Politico that in California, marijuana legalization could bring in $1.2 billion. He added that the marijuana industry could generate another $12 billion to $18 billion in economic activity in the state.
Harvard economics professor Jeffrey Miron, however, said that Gieringer’s numbers are inflated.
“This is not a cash cow that can solve anyone’s fiscal problems,” he said, adding that “there is a lot of exaggeration about how big the revenue can be.”
Polis noted that states should not tax marijuana too much.
“You want to make sure the black market doesn’t have an advantage over the regulated market because if it does, then the whole concept fails and people will continue to buy marijuana illegally — so there has to be a price advance for the legal market,” Polis told the website.
This week, a marijuana legalization bill that is being pushed through Maine’s legislature gained 35 co-sponsors, according to the Bangor Daily News.
“Maine can and should take a more sensible approach to marijuana policy, and we are glad to see so many legislators agree,” David Boyer, the political director of the Marijuana Policy Project in Maine, said in a statement obtained by the Daily News.
The bill is sponsored by Democratic Rep. Diane Russell and got publicity by Republican Rep. Aaron Libby, a co-sponsor of the measure.
“I believe that ending marijuana prohibition is a true part of limited government,” Libby said in February.
The bill now will now be heard by the state’s legislative committee.