Cannabis has been one of the fastest-growing industries in the country for the past couple of years bringing in billions of dollars in sales and tax revenue. Over the pandemic, cannabis sellers saw month-over-month sales records while other sectors stagnated.
Over the course of 2021, states with legal marijuana markets generated more than $3 billion in tax revenue from cannabis sales. A Marijuana Policy Project report shows that this is a slight improvement over the $2.7 billion states collected in 2020.
States with legal cannabis markets are now debating how to spend the taxes raised from the sale of this controversial plant. In the past few years, a couple of states have tried to pass laws that would direct a portion of cannabis taxes to programs designed to aid communities that had been disproportionately impacted by the drug war.
This includes granting members from these communities first access to marijuana business licenses. States such as Illinois and California, which have the largest legal cannabis markets in the country, have dedicated some cannabis taxes to programs that fund police departments and attempt to repair the harms of drug arrests.
According to an analysis by NBC News, Illinois has spent the most marijuana tax revenue on programs meant to alleviate the effects of the decades’ long war on drugs. Oregon has also invested cannabis dollars in increasing public access to substance-abuse treatment programs as well as harm reduction programs. The state has also passed legislation that will support disproportionately underserved communities. On the other hand, states such as Michigan and Maine have chosen to pay for infrastructure, including roads, or fill their general funds with cannabis taxes.
State general funds received the most cannabis taxes last year ($494 million) followed by education ($405 million), state police departments and public safety ($172 million). Social equity programs meant to help communities that were most affected by drug arrests got a paltry 2% ($47 million).
New York, Illinois, Virginia and New Jersey have been adding programs designed to address the harm drug arrests cause on society. President and CEO of the Marijuana Policy Project Toi Hutchinson says such programs are beneficial because they reduce the toll drug arrests have on these marginalized communities.
In a bid to compete with the roaring black market and reduce entry barriers for entrepreneurs from minority communities, stakeholders in California’s marijuana industry are pushing for lower taxes. However, child advocacy groups argue that this would eat into the funds dedicated to community reinvestment grants.
In Virginia, Republicans unsuccessfully tried to get rid of provisions that earmark some cannabis taxes to programs meant to aid disenfranchised communities and provide loans to businesses run by minorities.
All these discussions about how best to utilize the taxes generated from the marijuana industry show that licensed companies such as Cannabis Strategic Ventures Inc. (OTC: NUGS) are making a vital contribution to the communities in which they operate.
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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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