There is one age-old adage that is as important as ever when it comes to the expanding legality of cannabis in the United States: follow the money. With Colorado recently announcing $500 million in tax revenue from medical and recreational cannabis since 2014, the pioneering state continues to showcase the substantial upside for state governments often short on public funding. As Colorado spreads out the cannabis revenue to assist adoption centers, youth programs and more, the rest of the country is now able to see a real-world blueprint of how cannabis legalization can benefit a state’s public welfare and budgetary outlook, further depleting the case for the continued prohibition of marijuana.
Although the tax revenue issue has long been a driving force for legalization, the announcement made by lobbying firm VS Strategies is still nothing short of a major step forward for cannabis advocates. More than anything, it demonstrates that the potential of cannabis revenue is no longer theoretical, prompting Strategies VS Strategies partner Brian Vincente to point out that “Colorado continues to be an example for the world” when it comes to the upside of cannabis. While many other states have been on the fence about legalization for some time now, Colorado appears to be significantly reaping the benefits for taking the plunge as other states preferred a wait-and-see approach.
The impact on the budget has also been nothing short of profound according to Rep. Jonathan Singer, a Democrat lawmaker who appeared with Vincente at the press conference to make the announcement. To Singer, “marijuana has become the thread that holds our state budget together,” offering insight into the enormous amount of relief the revenue has brought to the otherwise extremely tight state budget.
While some detractors have pointed out that cannabis revenue won’t solely solve the state’s long-term budget challenges, the immediate impact of the revenue has been very significant, particularly on the local level. One of the biggest benefactors of the revenue, the Tony Grampsas Youth Services Program, has already taken in about $3 million and has committed hundreds of thousands in grants to Aurora-based non-profit Adoption Exchange. Other funds are already being disseminated to school construction projects, substance abuse programs and youth mentoring services, further undercutting critics who insist the negatives of legalization outweigh the public benefit.
The amount of tax revenue from cannabis also continues to increase as the industry gets more and more established throughout the state. In 2014, roughly $76 million in revenue was taken in from cannabis, although that number has since grown to more than $200 million in 2016. By the end of 2017, yearly revenues are expected to surpass a quarter of a billion dollars, demonstrating that the money is pouring in every bit as fast as Colorado lawmakers might have hoped when pressing for legalization.
The announcement also comes at a crucial time when other states are getting ready for their own legalization pushes during upcoming elections. A diverse set of large states, including Florida, Michigan and Arizona, are already planning on putting legalization of recreational cannabis on the ballot for the 2018 mid-terms, with other states also expected to join as well. For fiscally troubled states that are still undecided about whether to move forward with legalization, Colorado’s robust showcase of cannabis tax revenue will only fuel the claims that supporting marijuana reform is becoming a budgetary imperative.
As Colorado pushes forward along with other early-adoption states like Washington, Alaska and Oregon, the raw numbers continue to undermine the opaque arguments of detractors like Kevin Sabet of Smart Approaches to Marijuana, who claims Colorado loses $3.3 billion annually due to lowered productivity since cannabis legalization. While Sabet and other cannabis critics continue to utilize ambiguous and theoretical stats, the case for cannabis legalization continues to strengthen as the cut-and-dry budgetary impacts of cannabis tax revenue come into focus. Although each state will face its own challenges when it comes to implementing regulations and taxing standards for cannabis, Colorado is proving to be an essential trendsetter that will only embolden cannabis advocates to attempt to duplicate the success of the Centennial State.