Federally legalizing marijuana would generate $57.9 billion in new tax revenue over a decade, according to a new Yale University analysis—and additional states also moving to legalize cannabis would nearly double that haul.
The report, from the university’s Budget Lab, notes that the “cannabis market has grown into a substantial economic sector” but caveats that there is an “unusual degree of uncertainty” about the fiscal projections, however, given the “complicated legal context” of marijuana.
“Marijuana presents an appealing target for taxation,” the Yale analysis says, noting that it is considered by many policymakers to be “socially undesirable”—as is the case with alcohol and cigarettes.
“A tax levied specifically on marijuana could serve the dual purposes of discouraging use and raising revenue, thereby funding new public spending or replacing taxes on socially desirable activities like work or savings,” it says.
Researchers projected that if cannabis were federally rescheduled and an excise tax of $0.00625 per mg of THC were applied, a gram of marijuana would be taxed at $1.31. “At an average price of $8.59 per gram of marijuana, this tax would amount to about a 15% increase in the tax-inclusive price,” the report says.
The tax would result in $57.9 billion
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