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Recreational marijuana could generate millions in tax revenue – study finds

Recreational marijuana could generate millions in tax revenue

In Montana, recreational marijuana revenue could be between $43.4 and $52 million, if voters approve the ballot initiatives that legalize the substance next month. 

Millions of dollars in tax revenue

According to a new report released by the Bureau of Business and Economic Research (BBER), legalized recreational marijuana could raise more than $236 million in tax revenue between 2022 and 2026. BBER Director Patrick Barkey and associate director Robert Sonora authored the report. 

Additionally, the report reveals that the total market sales for legalized retail marijuana could reach up to $217 million in 2022 and increase to $260 million in 2026. The figures were based on the trends witnessed in other states that have legalized recreational marijuana.

According to the authors, the report answers the financial “what if” questions related to adult-use marijuana legalization. New Approach Montana, the group supporting CI-118 and I-190 initiatives that seek to legalize, tax, and regulate recreational marijuana in Montana, funded the report. 

Our independent research utilized the extensive survey-based data that is publicly available, detailing the frequency of cannabis use of both Montana residents and visitors to give us a good understanding of potential tax revenue on legalized retail cannabis sales, said Barkey.

The BBER on its part is a neutral entity and does not endorse any ballot initiatives, including the marijuana initiatives.

Recreational marijuana legalization in Montana

The two ballot initiatives aim to set the minimum age for buying marijuana at 21. They also aim to set the tax rate for marijuana purchases at 20 percent. The proposed 20% tax is what could raise millions of dollars in revenue. 

If implemented, the cannabis tax revenue would be much more than the alcohol-based tax revenue. The BBER analyzed how recreational marijuana markets started and evolved in states that have legalized the substance. They also used data from the National Survey on Drug Use and Health to inform the report. 

In the end, the authors of the report were able to predict the number of people, both residents and tourists, who would be potential customers of recreational marijuana. The report found that in addition to raising significant tax revenue, adult-use marijuana legalization in Montana would help other industries.

Upon legalization, marijuana-based cottage industries, cooking classes, and weed-friendly bed and breakfasts are likely to spring up. This has been witnessed in other cannabis-friendly states like Colorado.

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Ashley Combs

Ashley is a writer with a strong understanding of and passion for the cannabis market. At, she covers everything from the cannabis stock market, cannabis market regulations to cannabis legalization news from the USA and worldwide. She loves cats 😼

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