Nearly $4 billion collected by states in cannabis tax revenue in 2021 – How are states using this money?
A new report from the Marijuana Policy Project (MPP) revealed that in states where recreational marijuana has been legalized, more than $3.7 billion has been raised in tax revenue last year alone, posting a 34% increase over the revenues collected by the states the previous year.
According to MPP Chairman Toi Hutchinson, the report is “further evidence that ending cannabis prohibition offers enormous financial benefits to state governments.”
“The legalization and regulation of adult cannabis has generated billions in tax revenue, funded important state-level services and programs, and created thousands of jobs across the country,” she revealed. in a press release. Press release. “Meanwhile, lagging states continue to waste government resources enforcing archaic cannabis laws that hurt far too many Americans.”
States that have collected tax revenue from adult cannabis sales have allocated the money to many programs and services that benefit the local community. Examples of this include building schools, education, public libraries, early literacy, bullying prevention, drug and alcohol treatment, and much more. There are now 18 states that have legalized cannabis for adult use for Americans age 21 and older; in addition, 8 laws have been approved in the past 2 or 3 years, but in 6 of these states tax and sales collections have not started.
However, only 4 out of 11 states that have already started collecting the sales tax for adult use in 2021 (Colorado, California, Massachusetts, and Illinois) have allocated funds for equity and restorative justice programs. Illinois allocated the most of all, spending almost a quarter of its cannabis tax revenue on these programs.
Here’s what some of the top states have done with their cannabis tax revenue:
California gave the green light to Proposition in 2016, which legalized cannabis for adult use. The legislation was hopeful for voters who believed it could undo the damage caused by war drugs, while generating revenue in programs that would help the community such as youth programs, public health, environmental restoration and drug abuse prevention.
Since then, California has consistently had record cannabis sales, even throughout the coronavirus pandemic. As for spending their tax revenue, California has donated funds to address issues caused by cannabis arrests and has also contributed cash to police departments, reports BNC News.
Last year, they announced in June that they had awarded some $29 million in tax revenue grants to 58 nonprofits dedicated to repairing the damage caused by the war on drugs, by through the California Community Reinvestments Grants program.
Nonprofits also support programs that help with job placement, addiction treatment, mental health treatment, and legal services for disproportionately affected communities.
Illinois is notorious for its high taxes and prices, but that hasn’t stopped people from buying their cannabis. In January 2020, Illinois legalized sales for adult use and since then they have consistently seen record product sales.
As a result, they are among the highest cannabis tax earners. According to sun hour, $134.1 million is helping fund two projects to help communities hardest hit by the war on drugs as well as fund addiction treatment and mental health programs. An equally large portion is allocated to the general budget and state stabilization, while more than $60 million is used to pay for administrative costs, cannabis suppression programs, local government funding, addiction education and research on the effects of cannabis legalization.
Funds also went to Restoration, Reinvestment and Renewal Program (R3)which was created as part of the legalization of adult use, a law that requires 25% of cannabis tax money to be allocated to this program so that disadvantaged communities have access to services such as community reintegration, youth development, legal aid and financial support.
Adult cannabis use has been legal in Washington State since 2012, with the passing of Initiative 502. They are one of the pioneers of cannabis legalization, being one of the first two states to legalize adult-use marijuana with Colorado.
Most legal cannabis tax revenue goes, in order: general government fund, basic health programs, local governments, Washington State Health Care Authority, Department of Health, Washington State Patrol , the Washington Liquor and Cannabis Board, and others.
Additionally, nearly half of all cannabis tax revenue from fiscal years 2015 to 2021 went to the basic health care plan trust account, reports the Washington State Treasurer website. According to them, this account provides “basic health care services necessary for workers and other uncovered persons, at a cost for these persons that does not create a barrier to the use of necessary health care services”.
Recreational cannabis has been legal in Colorado since 2014 and medical marijuana since 2000, thanks to the passage of Colorado Amendment 64. They were the first state in the country to legalize medical marijuana.
Recreational sales taxes go to the state’s general fund, while a portion goes to the Public Schools Fund of the Ministry of Education. The rest goes to the Marijuana Tax Cash Fund, which funds education programs. Additionally, lawmakers have allocated some $25 million to school districts to establish full-day kindergarten programs, reports the Colorado Sun. A portion of the taxes also helps the Colorado Department of Agriculture with costs associated with the hemp seed regulatory and certification program.
And that’s a summary of how some of the biggest cannabis sales tax earners in the country use their money. Are you happy with how your state is using theirs?
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