slides: Legalized Marijuana Could Net Massachusetts $81.5 Million Per Year

Saturday, September 27, 2014

Nicholas Handy, GoLocalWorcester Contributor

The legalization and taxation of marijuana in Massachusetts has the potential to bring $81.5 million in taxes to the state, according to new research from NerdWallet.com.

Looking to inform the public about potential revenue gains as a result of legalizing and taxing marijuana, NerdWallet crunched some numbers and created a formula similar to the one used to project potential tax dollars in Colorado.

“Everyone knows that legalizing and taxing marijuana would create tax revenue, but we wanted to work to put a number on it,” said Divya Raghavan, who wrote the report. “I think that this might help to educate people and maybe even change the perception of those who might be on the fence. We aren’t looking to change anyone’s minds with this study; we were just looking to add more data to better inform the public.”

Check out the slideshow below to see the statistical break down for all the New England states.

Methodology

To estimate the value of marijuana purchased and consumed, NerdWallet used data from the Substance Abuse and Mental Health Services Administration, detailing the percentage of marijuana smokers ages 25 and over in each state and multiplied that percentage by the state’s population older than 25 to get the number of users in each state.

NerdWallet used state and local tax rates compiled by the nonpartisan Tax Foundation to estimate the amount each state would earn in sales tax revenue. They added a 15% excise tax (a tax levied on a specific good, such as cigarettes or gas), which is the excise tax in Colorado for marijuana purchases.

NerdWallet admitted that these are just estimates and could be affected state by state by a few factors including: variations in excise taxes, reduced spending on law enforcement, medical marijuana sales, and potential market changes.

A Part of The Puzzle

Those in favor of marijuana think reports like these are great – they add one more item in a growing list as to why marijuana should be legalized – but it should not be the only reason why.

It may be a point that sways some people who are on the fence about legalizing marijuana, but the most important reason why people should want it legalized is to take the drug out of criminal dealers hands and into the hands of reputable businesses who will sell a safe and controlled substance.

“Generating new tax revenue is a significant benefit to legalizing marijuana,” said Mason Tvert, Communications Director of the Marijuana Policy Project. “But most importantly, we need to stop punishing marijuana users and other adults. The economic benefit of marijuana should certainly be noted, but it should not be the sole reason why marijuana is legalized. This substance needs to be taken out of the black market and put into legitimate businesses so that it can be properly controlled and regulated.”

Taxation Should Not Change Perception

Those who continue to argue about the legalization of marijuana both in Massachusetts and nationwide argue that crime trends and health issues are two huge reasons why the drug should not be legalized.

Regardless of whether or not people think that marijuana increases crime or has negative effects on health, some opposed say that the taxation of marijuana will do little to help the economy, warranting the findings of this report less than important.

“The theory of legalization looks a lot prettier than the policy in practice,” remarked Kevin A. Sabet, President of Smart Approaches to Marijuana (SAM). “Revenue numbers are low, the underground market is thriving, and health issues are mounting.”