Legalized marijuana is expected to generate more green as states understand the economic incentives to making the canna-business industry legal.
With the legalization of marijuana in several states, the “green wave” sweeping the nation is proving to be a bright spot in the job market, having a positive effect on those economies and leading to increased tax revenues, according to a news report.
In Colorado, the Mecca of the business, marijuana has been legal since 2014. Since then, the industry has grown exponentially, generating over $2.3 billion in cannabis tax revenue in 2022 alone, reports say. As a result, the state’s economy saw a significant boost, with tax revenues from tax marijuana sales hitting $325 million so far in 2023. Moreover, the industry has created over 30,000 jobs in Colorado with a wide range of positions, from cultivation to retail sales to laboratory testing. The state’s unemployment rate declined due to job growth.
Colorado’s government collects taxes in three different categories related to marijuana sales. The first in the category is the State Sales Tax of 2.9% on marijuana sold in stores. The second is the State Retail Marijuana Sales Tax of 15% on retail marijuana sold in stores. Lastly is a State Retail Marijuana Excise Tax on wholesale or transfer of retail marijuana (15%), the Colorado Department of Revenue. All gathered data on marijuana sales tax throughout the states is updated.
Experts predict legalizing marijuana will boost state economies, and online dispensaries will profit from rising sales. Another example is New Mexico, where the state successfully regulates marijuana sales within its borders, expecting to generate $10 billion in annual revenue by 2025.
In states like Colorado and Mexico, where marijuana is legal for recreational use, the industry has surpassed tourism to become the leading moneymaker, dwarfing the state’s $1.6 billion in the tourism industry and causing neighboring states like Texas to lose out on potential revenue.
Despite the issues surrounding cannabis legalization, recent polling from the Texas Politics Projects has shown that most Texans favor marijuana reform, adding to the pressure for the state to follow in the footsteps of its neighbors and legalize cannabis.
The benefits that Colorado and Mexico have seen are occurring in state after state that has legalized marijuana. In California, total cannabis tax revenues hit $221.6 million in the fourth quarter. Among all states, California, Washington, and Illinois are ramping up as the top earners for collecting marijuana tax revenue, outpacing alcohol and tobacco, according to Urban Institute.
Whether you’re an entrepreneur, job seeker, or simply curious, keep an eye on the green wave as it shapes the future of the economy.
Here’s more information on the topic:
Colorado marijuana sales tank in 2022 after pandemic-induced high
Could taxed marijuana sales lower Texans’ property taxes?
How the industry is performing and where it’s headed