Wednesday, April 24, 2013

Federal Legalization of Marijuana Would Generate Billions in Tax Revenue

Don't expect marijuana to be legalized federally any time soon, but if it is, experts suggest that it could bring in billions of dollars in tax revenue. 2010 research from the Cato Institute estimates that legalizing marijuana federally would generate $8.7 billion in federal and state tax revenue annually. This would help Washington lawmakers balance the national budget, something that has eluded them in recent years.

The researchers assumed that marijuana would be taxed similarly to alcohol and tobacco. The income earned by pot producers, sellers, and distributors would also be subject to standard income and sales tax. In addition, state and federal authorities could save billions in money that they currently spend trying to regulate and prosecute marijuana use.

Currently, Washington and Colorado are the only two states that have legalized marijuana, but more states are considering it, including California and Oregon. It seems that the majority of Americans also support the legalization of marijuana, which was reflected in several polls across the country.

"We don’t know the size of the marijuana market right now, and we certainly don’t know what would happen to the price and the demand for marijuana under different levels of legalization. But we do know that legalization would lead to a positive revenue impact on the income and sales tax side."
                   --- Carl Davis, senior analyst at the Institute on Taxation and Economic Policy 

Monday, April 22, 2013

Washington Delays Pot Sales Till Spring

The State of Washington is delaying pot sales until next spring, because the original timeline for granting marijuana growing and processing licenses is being pushed back until December .Washington's Liquor Control Board has been in charge of devising the rules that will govern this new industry. This includes specifying how the plants will be grown, how the product will be tested, and how many stores will be allowed to sell marijuana. This official timeline was changed based on input from several public forums.

In mid-May, the Liquor Control Board will begin drafting rules for all license types and these rules are expected to become effective in August. In September, the board will begin accepting applications for growing, processing, and retail licenses in Washington.

“If you were interested in becoming any of our licensees, you’d want to have a good idea of what the business landscape is going to be. For example, if you want to grow, how much competition will you have? How many retailers will there be? You’ll be able to get a sense of that right from the beginning.
                             --- Brian Smith, Spokesman for the Washington Liquor Control Board

All eyes are on the State of Washington and on Colorado, since they were the first states to legalize recreational marijuana for adults over the age of 21. If this goes well, then other states in the country are sure to follow. As a result, the Liquor Control Board is eager to get this thing right---the first time.