Could the classic sports film Field of Dreams (and its famous tagline “If you build it, they will come.”) have been the inspiration for legalized state cannabis markets?
They aren’t playing baseball, obviously, but states that followed Colorado and Washington State’s lead have consistently hit home runs in terms of tax revenue that legal cannabis sales have generated—to the tune of a cumulative $10.4 billion since 2014. Bear in mind that these statistics reflect recreational sales only, and don’t even figure in the potential additional billions of medical cannabis tax revenue to date.
But the astronomical numbers, published in a Marijuana Policy Project (MPP) report in early January, do not by themselves tell the entire story. Even better than the amount of tax dollars raked in is the way states are reinvesting it within their borders.
By no means does a state—even a legalized cannabis state—fix all of its problems simply by throwing money at them, but having the extra tax revenue certainly doesn’t hurt. The MPP report detailed specific ways in which states are earmarking funds to tackle their most pressing social challenges.
- In Alaska, for example, 50% of adult-use cannabis sales revenue “is invested in the Recidivism Reduction Fund and supports reentry programs for currently and formerly incarcerated individuals.”
- California has distributed more than $100 million to community groups and local nonprofit programs that benefit people adversely impacted by punitive drug laws.
- Colorado public schools have benefitted from a nearly $500 million investment of cannabis tax revenue.
- Illinois is dedicating a percentage of its tax revenue to mental health services and local organizations that uplift disadvantaged communities. Incidentally, the state’s 2021 cannabis tax revenue outpaced that of alcohol by $100 million.
- Washington State funnels more than half ($600 million) of every $1 billion in cannabis tax revenue into public health initiatives, including a fund that provides health insurance for low-income families.
The impact of cannabis tax revenue is so pervasive that the U.S. Census Bureau even has plans to gather and study data regarding how states use the money to improve their infrastructure and social programming.
We’re not implying that anyone is “late to the party” (we’re cannabis advocates so we’re generally really chill), but the enormous tax revenue flurry presently upon us is unfolding exactly how industry experts predicted it could and would. And yes, states that have not yet legalized cannabis in any form are missing out on an overflowing pot of raw cash, which likely incentivizes the move.
More importantly, however, as the MPP report outlines, legalization gives states a real opportunity to foster healing and reconciliation with their people and communities for whom cannabis was previously a source of legal turmoil.
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