Tags: marijuana | legalization | tax | revenue | growth

Uneven Growth Hampers Marijuana Tax Revenue

 marijuana plant is shown
(AP)

By    |   Monday, 19 August 2019 11:04 AM

Tax revenue on marijuana in states that have legalized it has been unsteady, making it difficult for those states to rely on it as a source of funding, The Hill reports.

"The market is new, and there is little data that forecasters can rely on," said Alexandria Zhang, who recently co-authored a report on marijuana tax revenue for Pew Charitable Trusts. John Lehner, a senior economist with Oregon's Office of Economic Analysis, told Pew researchers that when it comes to marijuana, “the biggest issue is lack of data, lack of history.”

Budget analysts don’t know how many people in the state use marijuana, how many of them will switch from illicit sources to legitimate ones, how quickly legal businesses can open, and whether the black market will outcompete the legitimate market.

"For standard forecasting models, it's helpful to have more detail about demographics, consumption and product types. We're not there, and other states I've talked to aren't there either," Lehner said, adding that it’s difficult in particular to determine how patterns of consumption will change.

“Sixty percent of Oregonians say they’ve had a drink in the last month. Twenty percent say they’ve used marijuana,” he said. “Does marijuana go all the way up there, where the majority of Oregonians say they’ve used it in the past month? That’s the big-picture uncertainty.”

In states that legalized marijuana early, like Colorado and Washington, tax revenue from marijuana has quadrupled since 2015, but in states that legalized it more recently, the market has seen difficulty getting off the ground. California’s tax revenue was 45 percent below expectations in the six months after the legalization laws took effect.

"Many of these new revenue streams are highly unpredictable and they can lead to more problems down the road if states aren't careful," Zhang said.

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Tax revenue on marijuana in states that have legalized it has been unsteady, making it difficult for those states to rely on it as a source of funding, The Hill reports.
marijuana, legalization, tax, revenue, growth
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2019-04-19
Monday, 19 August 2019 11:04 AM
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