Taxing marijuana would be an asset to this country’s economy by helping them with the debts, rebuilding schools, and lowering crime rates. According to Matt Ferner of the Huffington Post, since Colorado legalized marijuana the state has made $600 million in combined wholesale and retail sales (Ferner). This can be great because the United States could pay off much of its debts. That amount of money was earned through a 25 percent tax on retail purchasing, including a 15 percent excise tax, and a 10 percent sales tax (Ferner). Another asset of taxing marijuana is that the government can give some of the money to the public. Some of this money can go to schools, hospitals, and medical treatments. The rest can go to creating new office buildings for people that have no jobs or got laid off can go start a career with a new company. This taxation money can used to fix our roads and fix all the bumps that people are hitting and popping their tires.
According to Nick Allen, Colorado was the first US state to license and tax sales of the drug for recreational use (Allen). Nick Allen, a reporter for the Daily Telegraph, there are now 163 cannabis shops in the state (Allen). Allen said marijuana is currently selling for more than $202 an ounce. The governor said the latest estimates were based on “a number of assumptions of the new industry” and included “variables” like the number of tourists visiting to buy the drug (Allen). The state is using the first $40 million it collects in taxes each year to build schools (Allen).
Although marijuana is legal there are efforts by the government to control use. Since marijuana use is only for adults 21 year of age and up, it would include efforts to prevent cannabis use by teenagers, campaigns against driving under the influence of the drug and the public health projects. Residents are not allowed to smoke wherever you please, and you can buy only a limit of marijuana. According to NBC news, half the states 35 licensed recreational retailers who shared their proprietary data with NBC news say they have collected 1.24 million in tax revenue (NBC). All sales are assessed the standard state sales tax of 2.9 percent, plus there is a special 10 percent state tax and 15 percent excise tax, and there is also an extra local sales and excise tax in many cities (NBC). In addition to sales taxes there are a couple of rules for the sale of marijuana. There is a state sales tax imposed on retail marijuana and marijuana products on top of the 2.9 on existing state sales tax which is an addition to local sales tax.
According to Kelly Phillips, a contributor to Forbes stated that together with the sales and special taxes, and Phillips stated that Denver County accounted for more than half of all medical and recreational marijuana related sales tax while outside of Denver; taxes can be closer to 13 percent (Phillips). However, as the price for marijuana gets higher, Colorado will still be taxing and the state will still be making a lot of money from this drug.
The majority of Americans say they prefer cutting programs to increasing taxes as a way to deal with the nation’s budget deficit (Huffington Post). Marijuana legalization would seemingly give the government money without doing either (Huffington Post). Also according to the Huffington Post, with this legalization it can improve the economy as much as 13.7 billion per year, and as the Huffington post states, “At a minimum, this debate will force advocates of current policy to show that prohibition has benefits sufficient to justify the cost of taxpayers, foregone tax revenues, and numerous ancillary consequences that result from marijuana prohibition”. With the economic benefits of pushing marijuana in to mainstream commerce have long been cited as a reason to make the drug legal and the economists’ petition comes as government officials both the federal and local levels are looking for ways to raise funds (Huffington Post). Economist Stephan Easton writes in BusinessWeek that the financial benefits of pot legalization may be even bigger than the finding estimate. Easton guesses that legalizing marijuana could bring 13.7 billion. It is stated that legal pot sales can generate 20 million or more in one year, which can cut back on government costs of running jails and prisons because legal sales would reduce arrests and incarcerations (Huffington Post).
The demand for medical marijuana is growing across the states. The more states to legalize marijuana use and start opening more stores, the more taxes are paid, and the less debt to be paid. According to Kristine Cannon, who is a reporter for Arizona BIGMEDIA states that with the law of supply and demand, the number of applications for franchises selling products to help cultivate the crop soared immediately following the legalization of marijuana in Arizona. Dhar Mann founder and CEO of weGrow, is a medical marijuana retailer, says he has provided 15 to 20 part-time and full-time jobs because there are a lot of people in Arizona that are interested In the medical marijuana field (Cannon). “We’ve had a lot of new patients walk into the store wanting to start their very first garden” (Cannon). Mann says weGrow and the marijuana industry could have a profound economic impact on Arizona, generating hundreds of thousands of dollars in tax revenue (Cannon).
With marijuana being taxed in Colorado, the taxes collected from this drug can make their state less debt free every year. As the states proceed with their plans, they’re eyeing big money from sales. In Washington State, officials are predicting that with this legalization, it can produce 1.9 billion in revenue, and with this kind of money, the government can use it to help pay back the debt 17 trillion they owe. Former Rutgers student Max Brusnikin who deals a lot with political science as a prime job states “This legalization can either be a good or bad cause for any other state, with all the taxation going on in Washington and Colorado, debts might soon be paid off, and marijuana might be taxed in every state, but only medical, not recreational” (Interview). According to Rob Hotakainen, DeAngelo, the executive director of the harbor side health center marijuana dispenser, said he was the number two retail taxpayer in Oakland, and paid over 1.5 million to the city last year (Hotakainen). He said “we were denied all of our deductions on the grounds that we’re a drug trafficking organization”.
According to David Migoya, who is a reporter for San Jose Mercury news in California states that with all the business that marijuana has to offer, retailers started making agreements with banks and sign commercial notes so they can pay the ease for the property, which led the door opened to financiers willing to take on the industry and its associated risks (Migoya). “ A couple of the bigger banks have a scorched earth policy, moving immediately to eviction or simply calling the note, with no courtesy to allow them to do anything else” said Robert Frichtel who is a former commercial mortgage broker who is a CEO of advanced cannabis solutions in Colorado springs (Migoya). This means these risks made by banks, including Wells Fargo, give commercial clients an ultimatum, which drops the marijuana related tenants of property financed with bank funds, or pay up the entirely of the loan. “How we assess risk and how we do it is part of our investment program, and we simply don’t discuss it”. For example a company bought 5,000 square foot of steel building and parking lot on 3 acres for 450,000; they will finance 170,000 with a four year private note. All of this is an investment, but it can be very tricky but it can lead to good fortune. Most experts say “it is mostly because it removes the risk that come with owning a cannabis business.
A huge company like ACS announced that it made 30 million line of credit from private investors to purchase properties. And the more properties business buy, and the more businesses owner open, the investment can lead to huge business, and all the more taxes can be paid for the necessary use. But not since anyone is a buyer, some lenders just simply want to move just for the money, and move on. “It’s the biggest wildcard in any industry, with the threat of the feds coming in and stealing your property, a loss on the order of a few million” said Kerry Blasdel who is a real estate investor in Colorado spring who stepped into the competition. According to David Migoya, the questions still lies weather the federal government, already tense and terse about legalized marijuana in several states, will scoop up industry proceeds cash and land included a should a business have questionable or illegal ties (Migoya). Another example of this business is in Arizona where there are zoned properties geared to buying properties and leasing them to cannabis companies, with druthers to move into Colorado (Migoya). Arizona resident Marc Brannigan bought 91 percent of what was then the vanguard minerals corp, and created a new business with them. Until than private money is about the only source of landowners such as Blasdel to acquire financing (Migoya). According to Reid Wilson, both private businesses and state government stand to make millions of dollars when the sales pf marijuana for recreational use began (Wilson).
Other states are betting that the Colorado experiment will pay off. According to Reid Wilson, a contributor for the Washington Post claims that Washington budget officials estimate the state will reap about $134 million in tax revenue from marijuana sales in 2015-2017 (Wilson). In Washington all marijuana has to be grown from Washington before getting sold in retail outlets. According to Reid Wilson, marijuana legalization is also providing to be something of an experiment for enforcement officials. Several jurisdictions, including King County, home to about 2 million of Washington’s 7 million residents, backed off prosecuting low-level marijuana crimes even before the vote to legalize the drug (Wilson). According to Joe Harpaz, who is a contributor to Forbes states that Washington State also legalized marijuana with a 25 percent excise tax on all phases of productions in addition to an 8.75 percent sales tax, which analysts expect will add 37 percent to the retail price of marijuana. According to Mike Baker of the Huffington Post, more than 3,700 marijuana business applications have now been filed in Washington State (Baker). Along with the with 1660 producers and applications, the state has released details on 867 proposed retail outlets. Along with selling marijuana in Washington, Washington’s liquor store control board released an update that they received 3,746 applications to grow, process or sell cannabis under Washington’s recreational marijuana law. As well as other states trying to make marijuana legal, Alaska, Arizona, D.C. and Oregon are said to be mulling loosened marijuana laws as well.
Marijuana should be legalized and taxed throughout the entire country because it will be more beneficial than it is harmful. The taxes that can be collected from selling recreational marijuana can help eliminate the debts that much of the countries is in. It can help rebuild the roads that people drive on, and build new schools and buildings. Opening more business of marijuana can increase more investments that stockers put in, and that would accumulate more money and with more money that is being made, the more taxes are going to come out and help this country become more and more debt free. With marijuana being legal, it is being taxed the same as alcohol, which is doubling more money in taxes. It can be a very risky opportunity but if all goes well, there can be a deduction in crime rate, less people will be arrested, and crime poverty may go down.
Allen, Nick. Tax Bonanza from Colorado Drug Shops.Daily Telegraph [London] 21 Feb. 2014, National ed. n. page. LexisNexis Academic. Web. 17 Apr. 2014.
Baker, Mike. Thousands Want To Sell Pot In Washington. Huffington Post.
Huffpost, 24 Dec. 2014. Web. 30 Apr. 2014.
Brusnikin, Max. Personal interview. 18 Apr. 2014.
Cannon, Kristine. Wegrow Phoenix Opens, Cultivating Opportunities in Arizona. Az Big Media. Az Big Media, 13 Sept. 2011. Web. 17 Apr. 2014.
Erb, Kelly Phillips. It’s No Toke Colorado Pulls in Millions in Marijuana Tax Revenue. Forbes. Forbes, 11 Mar. 2014. Web. 17 Apr. 2014.
Ferner, Matt. Colorado Recreational Marijuana Sales Exceed $5 Million In First
Week. Huffington Post. Huff Post, 8 Jan. 2014. Web. 30 Apr. 2014.
Harpaz, Joe. How Tax Could Blunt The Growth Of The Legal Marijuana Market.
Forbes. Forbes, 20 Feb. 2014. Web. 30 Apr. 2014.
Hotakainen, Rob. Marijuana Industry Eager to Pay Taxes and Cash in on Deductions.
McClatchy Washington Bureau 16 Aug. 2013 n. pag. LexisNexis Academic. Web. 19 Apr. 2014.
Migoya, David. Lack of Banking Opens Private Money Doors for Marijuana Properties. San Jose Mercury News 7 Apr. 2014 n. pag. LexisNexis Academic. Web. 19 Apr. 2014.
NBC. NBC Co Pot Tax Revenue Could Be Double Alcohol. KGW. KGW, 3 Feb. 2013. Web. 19 Apr. 2014.
Pot Legalization Could Save U.S. $13.7 Billion Per Year, 300 Economists Say. Huffingtonpost. Huffingtonpost, 17 Apr. 2012. Web. 17 Apr. 2014.
Wilson, Reid. Growing Is Slow For Washington State’s Marijuana Industry.Washington Post 9 Apr. 2014 n. pag. LexisNexis Academic. Web. 19 Apr. 2014.