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  • by Paul Armentano, NORML Deputy Director July 20, 2017

    Marijuana ScienceRevenues from Colorado’s legal cannabis industry have surpassed over a half-billion dollars since retail sales began on January 1, 2014.

    According to an analysis by VS Strategies, cannabis-related taxes and fees have yielded $506,143,635 in new state revenue over the past three and one-half years. (Local tax revenue was excluded from the analysis.) Much of the revenue raised has gone to fund school construction projects, school-drop out and substance abuse prevention programs, and grant funding.

    The half-billion dollar total far exceeds initial projections. Tax revenue from legal cannabis sales in Oregon and Washington have also exceeded regulators’ initial expectations. In Nevada, where retail sales to adult became legal on July 1, retailers reported over 40,000 transactions in just the first weekend.

  • by Paul Armentano, NORML Deputy Director September 16, 2015

    NORMLState taxes specific to the production and retail sale of marijuana totaled some $70 million in Colorado over the past year — nearly twice the amount collected for alcohol during this same period.

    Financial data released this week by the Colorado Department of Revenue reports that state regulators collected $69,898,059 from marijuana-specific taxes from July 1, 2014 to June 30, 2015. This total includes the collection of $43,938,721 from the imposition of a 10 percent special sales tax on retail sales to adults, and $25,959,338 collected from the imposition of a 15 percent excise tax on wholesale transfers of marijuana intended for commercial sales. In comparison, the state raised just under $41,837,647 from alcohol-specific taxes during this same period, including $27,309,606 from excise taxes collected on spirited liquors, $8,881,349 from excise taxes on beer, and $5,646,692 from excise taxes collected on vinous liquors.

    Additional revenue attributable to the imposition of state sales taxes (2.9 percent) on retail sales of cannabis and/or booze were not included in the Department’s calculations. The majority of Colorado voters approved the imposition of cannabis-specific taxes (Proposition AA) in November 2013.

    According to market research reported recently by Marijuana Business Daily, the average amount spent on marijuana in states where the drug is legal is $1,800 per year versus only $450 for alcohol.

    In Washington state, where retail cannabis sales began last summer, data released today estimates that marijuana-specific tax revenues have generated $90 million in the past 15 months.

  • by Paul Armentano, NORML Deputy Director September 23, 2014

    Legalizing the retail production and sale of cannabis in the United States would yield over $3 billion in annual tax revenue, according to an analysis published this week by the personal finance website, NerdWallet.com.

    Authors provided a state-by-state economic analysis, taking into account available data estimating marijuana use rates (for those age 25 and older), cannabis market size, and state and local tax rates. Researchers also assumed a flat, 15 percent excise tax on commercial marijuana production. (This excise tax rate is presently imposed in Colorado.)

    Based on existing market projections, California would gain the largest amount of annual tax revenue ($519,287,052) were commercial cannabis production and sales to be legalized for adults. Other top tax revenue generating states include: New York ($248,103,676), Florida ($183,408,640), Texas ($166,303,963), and Illinois ($126,107,360).

    Washington, which began allowing retail cannabis sales this summer, is estimated to reap some $119,000,000 in annual tax revenue, according to the study’s projections. Colorado, which has allowed retail cannabis sales since January 1, 2014, is estimated to gain some $78,000,000 in annual revenue.

    Revenue projections for all 50 states are available online here.

  • by Allen St. Pierre, Former NORML Executive Director August 27, 2014

    majority_supportOur friends at High Times (and former NORML director Dr. Jon Gettman) are running an online poll asking for consumers’ choice regarding the preferred marijuana distribution that emerges post-prohibition.

    Legal Marijuana: Which Market Do You Prefer?
    As we approach the new inevitability of legalized cannabis, three models have been proposed for a national marijuana market.
    By Jon Gettman

    In the past, the goal of marijuana legalization was simple: to bring about the end of federal prohibition and allow adults to use the plant without threat of prosecution and imprisonment. But now that legalization is getting serious attention, it’s time to examine how a legal marijuana market should operate in the United States.

    Below are descriptions of the three kinds of legal markets that have emerged from various discussions on the subject. We would like to know which one you prefer.

    First, though, let’s touch on a few characteristics that all of these proposals share. In each one, the market has a minimum age for legal use, likely the same as the current age limits for alcohol and tobacco. In each of these legal markets, there will be penalties for driving while intoxicated, just as with alcohol use. You can also assume that there will be guaranteed legal access to marijuana for medical use by anyone, regardless of age, with a physician’s authorization. The last characteristic shared by all three mar- kets is that there will be no criminal penalties for the adult possession and use of marijuana.

    Proposal #1:
    Government-Run Monopoly
    Under this approach, there would be no commercial marijuana market allowed. Marijuana would be grown and processed for sale under government contracts, supervised and/or managed by a large, government-chartered nonprofit organization. Marijuana would be sold in state-run retail outlets (similar to the state-run stores that have a monopoly on liquor sales in places like Mississippi, Montana and Vermont, among others), where the sales personnel will be trained to provide accurate information about cannabis and its effects. Products like edibles and marijuana-infused liquids with fruity flavors would be banned out of a concern that they can encourage minors to try the drug. There would be no advertising or marketing allowed, and no corporate or business prof- its. Instead, the revenue earned from sales would pay for production costs and the operation of the state control organization; the rest of the profits would go to government-run treatment, prevention, education and enforcement programs. Regulations would be enforced by criminal sanctions and traditional law enforcement (local, state and federal police). No personal marijuana cultivation would be allowed. The price of marijuana would remain at or near current levels in order to discourage underage use.

    Proposal #2:
    Limited Commercial Market
    Under this approach, the cultivation, processing and retail sale of marijuana would be conducted by private companies operating under a limited number of licenses issued by the federal government. Advertising and marketing would be allowed, but they would be regulated similar to the provisions governing alcohol and tobacco promotion. Taxation would be used to keep prices at or near current levels in order to discourage underage use. Corporate profits would be allowed, and tax revenues would be used to fund treatment, prevention, education and enforcement programs. Regulations would be enforced by criminal sanctions and traditional law enforcement (local, state and federal police). No personal marijuana cultivation would be allowed.

    Proposal #3:
    Regulated Free Market
    Under this approach, entrepreneurs would have open access to any part of the marijuana market. Cultivation, processing and retail operations could be legally undertaken by anyone willing to bear the risks of investment and competition. Advertising and marketing would be allowed, but they would be regulated similar to the provisions governing alcohol and tobacco promotion. Prices would be determined by supply and demand, with taxation set at modest levels similar to current taxes on alcohol, tobacco and gambling. (These vary widely from state to state, but assume that under this model, the price of marijuana would be substantially lower than it is in the current market.)

    Also, home cultivation would be allowed. Licenses may be required for any sort of cultivation, but these would be for registration purposes only and subject to nominal fees based on the number of plants involved. Individuals and corporations would be allowed to make whatever profits they can through competition. Tax revenues would fund treatment, prevention, education and enforcement programs. Competition and market forces would structure the market rather than licenses or government edicts, and regulatory agencies rather than law enforcement would supervise market activity.

    A Different Approach
    There are two key issues when it comes to deciding among these proposals. First, should the price of marijuana be kept high through government intervention in order to discourage underage use as well as abuse? Second, does commercialization translate into corporate money being spent to convince teenagers to use marijuana? Many of the proposals for how a legal market should operate are based on assumptions about these two issues, which leads to recommendations that the government must, one way or another, direct and control the marijuana market.

    Obviously, the first two proposals outlined above reflect those very concerns. The third takes a different approach, in which marijuana is treated like similar psychoactive commodities, and the public relies on education, prevention and age limits to discourage underage use as well as abuse.

    We want to know what type of legal marijuana market you prefer. Please take part in our poll on the HIGH TIMES website.

  • by Paul Armentano, NORML Deputy Director November 10, 2010

    Despite last week’s defeat of Proposition 19 at the polls, new taxes on marijuana are coming to California.

    As I write today in High Times online, California voters on election day by wide margins endorsed citywide medical marijuana tax ordinances in Albany, Berkeley, La Puente, Oakland, Rancho Cordova, Richmond, Sacramento, San Jose, and Stockton. You can read the full details of each of these tax measures, as well as Los Angeles’ latest medi-pot tax plan, here.

    While the bulk of these new tax plans impose fees on the dispensaries themselves — fees that will no doubt indirectly be passed on to the consumer via higher retail prices for cannabis — at least one plan (Rancho Cordova’s Measure O) seeks to impact patients directly by instituting local fees on personal home grows.

    While it is possible (read: likely) that this exorbitant fee will be eventually struck down by the courts as an undue infringement upon patients’ rights under Prop. 215, it could be months or years before such a clarification by the courts is made.

    Patient advocacy groups like Americans For Safe Access oppose the implementation of such medi-tax laws, noting that they could unduly raise the already inflated black market price of medical cannabis, lead to fewer dispensaries, and ultimately limit patients’ access. Nonetheless, it is hardly surprising to see a majority of Californians, at a time of record budget deficits, voting to impose additional taxes upon a minority subset of their community.

    In short, the success of these tax measures at the ballot box is yet further evidence that with or without Prop. 19, more and more city governments — rightly or wrongly — are going to be looking at new ways to raise revenue from California’s burgeoning cannabis industry and its consumers. Industry insiders and those they represent, patients especially, would be best advised to begin playing an active role in their local politics, or else risk suffering the consequences of unreasonable taxation without representation.

    You can read my full thoughts on this developing issue, and comment on it, by clicking here: Like It Or Not, Pot Taxes Are Coming to California.

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