Of all the many reasons why marijuana should be legalized, none speak louder to government than tax revenues. Certainly, the changing attitudes towards marijuana have made it easier for different states to legalize cannabis but it would be naive to dismiss tax revenues as the primary driving force behind this legalization.
The large amount of monies being generated in the illegal cannabis market has been evident for decades, and has not gone unnoticed by governmental agencies; however, there has been a question-mark as to how the marijuana business would translate as a legitimate business enterprise, particularly with respect to taxes.
Colorado was the first state to legalize marijuana and many other state governments were watching to see the impact of the new business on state coffers. In 2014, legal marijuana was predicted to bring in approximately $70M in taxes but Colorado only collected $44M. Sales projections were simply too aggressive for the first year of legalized marijuana in Colorado and, indeed, the first year of legalized marijuana anywhere in the United States. In contrast, 2015 has lived up to the hype.
From January 2015 to present, Colorado has collected approximately $73.5M in taxes and is on target to bring in over $125M by year’s end.
Increased sales are due to any number of factors, including the greater number of retail marijuana dispensaries that have opened in Colorado and changing attitudes in the general population. In February 2015, a poll from Quinnipiac University found that 58% of Colorado residents are in favor of keeping cannabis legal, while only 38% oppose legalization.
Marijuana businesses are still hindered by regulatory issues, including not having access to credit cards and loans from traditional banking institutions, as well as not being able to avail themselves of certain federal tax deductions. However, despite these obstacles, sales remain strong and it is likely the marijuana industry will keep growing as social attitudes continue changing in favor of marijuana.