Cannabis is without a doubt one of the fastest-growing industries in America. Despite being relatively young, America’s state-legal cannabis industry has been quite lucrative, generating billions of dollars in revenue and creating hundreds of thousands of new job opportunities. According to a newly released report on the industry, marijuana has been extremely kind to state coffers; since 2014, cannabis sales have provided states with legal marijuana markets more than $10 billion in tax revenue.
The Marijuana Policy Project report states that since Colorado and Washington state sanctioned recreational cannabis sales in 2012, a wave of cannabis reform has swept across the country. By December 2021, 18 states in total had legalized adult-use cannabis and earned a whopping $10.4 billion in tax from cannabis sales. Since most marijuana reform laws had a strong emphasis on social equity, a significant portion of the billions of tax dollars has been used to fund various social equity programs, the report says.
According to Karen O’Keefe, the director of state policies at Marijuana Policy Project, the states that chose to legalize recreational cannabis have reaped “significant economic benefits” from the controversial but in-demand plant. The tax revenue from cannabis sales has been used to fund several public services, including ones meant to reinvest in communities that were disproportionately affected by the war on drugs. Compared to the decades-long drug war, which cost taxpayers billions of dollars per year, cannabis reform is actually pouring money back into the community, especially for the most disadvantaged ones.
The drug war was ostensibly started to address drug abuse rates and defund the criminal enterprises behind the drug trade, but after decades of intense policing and harsh sentencing, Black and Latino communities around the country were left decimated. Most states with legal cannabis markets have earmarked funds from marijuana taxes to help address this damage. Alaska, for instance, directs half of its recreational cannabis sales taxes to the Recidivism Reduction Fund as well as reentry programs for current and former convicts.
In California, more than $100 million in cannabis sales taxes have been dispensed to nonprofit and community groups that aid individuals who were negatively affected by the drug war. The state, which collected around $817 million in cannabis sales revenue in the fiscal year 2020–21, announced last year that it would provide grants worth $29 million to 58 organizations to help alleviate the effects of the failed drug war. Colorado has invested almost $500 million in the public school system while Illinois is spending a portion of its cannabis tax revenue on much-needed mental health services.
These huge numbers with respect to the taxes and fees that states have collected from the marijuana industry are a reflection of how quickly sector players such as American Cannabis Partners have scaled their operations so as to meet the growing demand for legally sourced cannabis products.
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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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