According to the Washington State Liquor Control Board, legal marijuana sales have transformed the face of the state’s economy in a record-setting way.
In just the first year alone, marijuana sales have generated over $70 million in tax revenue, which is almost double the amount of the state’s initial tax projection of $36 million. With numbers like this, it will not be long before other states start considering the financial benefits of legalizing marijuana.
As more policymakers continue to look for ways to reduce deficits and prevent budget gaps, many will likely start to consider the benefits and potential revenue that can be gained from sales following the legalization of marijuana.
While the amount of money being generated from the marijuana industry is not enough to financially run a state, it does keep the money out of the hands of drug dealers and illegal marijuana operations. The funds can help to boost local economies by creating job opportunities and more growth in various sectors.
Marijuana sales in Washington have far exceeded original expectations. Sales in the state have also trumped Colorado’s legal marijuana sales. Both states legalized recreational marijuana in 2012, and although Colorado became the first state in the U.S. to regulate the sale of marijuana in January of 2014, Washington was still able to generate more revenue. This occurred despite the fact that Washington did not start regulating marijuana use until July of 2014.
Marijuana has become a booming industry for Washington. The state is reporting $1.5 million in daily revenue from its 160 marijuana shops. According to data provided by the Washington Liquor Control Board, monthly marijuana sales are increasing at an astronomical rate.
Since July 1, 2014, the state’s marijuana shops have sold over 22,000 pounds of marijuana and more than 700,000 marijuana-infused edibles and liquids. During this time, state-licensed producers harvested more than 60,000 pounds of marijuana flower.
Washington has over 6 million square feet of space approved for the sole purpose of marijuana cultivation. It is apparent the state is setting itself up to be in a prime position to take full advantage of the legal marijuana industry. Although Alaska and Oregon have recently legalized marijuana for recreational use, the first legalized marijuana shops in both states are not scheduled to open until 2016.
Currently, marijuana is still federally classified as illegal in the United States. However, as more states look at the financial benefits Washington state has reaped and marijuana use becomes legal in more parts of the country, it may only be a matter of time before marijuana revenue grows to the point that it overtakes that of the organic food industry.
Colorado continues to set records for the amount of cannabis that it sells through legal shops and dispensaries — and the volume of tax revenue that it collects as a result.
In February, more than $39 million worth of recreational cannabis was sold in the Centennial State. This beat the previous record, set in January of this year, by nearly $3 million. Growth has been steady; in January 2014, the first month of legal recreational use, about $14.7 million was generated from pot sales.
This increase is attributed to additional retail shops that have been appearing in cities like Aurora, located just east of Denver, which began selling recreational cannabis last October. Statistics haven’t been released regarding the demand at individual shops and dispensaries, so it’s impossible to say how much of the growth in sales is the result of recently opened retail outlets serving new customers and what portion is an increase in demand by existing users.
While sales of recreational cannabis continue to climb, medical consumption has actually decreased somewhat since the state’s recreational law went into effect.
Medical Sales Declining
During the era of recreational legality, medical pot sales peaked at $36 million in February 2014, more than a year ago. That record was nearly $7 more than was sold one year later in February 2015, when medical sales totalled $29.3 million.
The decrease in medical sales is attributed by some observers to the fact that eligible patients must register with the state. With consumption of any type illegal at the federal level — and individuals and dispensaries in states like California and Washington continuing to be busted by the feds — the risk of having one’s name in a government database is believed to be pushing the state’s pot patients to instead pursue recreational herb, which doesn’t require such registration.
This could obviously have a major impact on Colorado’s medical dispensaries, which, like any business, must generate enough revenue to remain profitable and keep their doors open.
Overall Upward Trend
These numbers all point toward a bright 2015 for Colorado in terms of tax dollars collected. Unless trends change dramatically, the state will sell more cannabis in 2015 than 2014. Which will, of course, benefit public schools and other services.
In January of this year, Colorado schools received $2.3 million from recreational sales, generating media headlines across the nation. In February, schools collected $2.1 million. At this rate, the state’s school system will likely receive an infusion of more than $25 million during the year from the sale of marijuana.
In 2014, Colorado sold more than $700 million worth of cannabis ($386 million for medical and $313 million for recreational). With 2015 projected to be an even bigger year for the state’s pot business, it’s no wonder that so many other states — even conservative ones like Arizona, Ohio, and Michigan — are seriously considering legalizing medical and recreational marijuana in an effort to decrease law enforcement expenses, generate much-needed tax revenue, and eliminate the criminal element that’s ingrained in the black market.