The state of California was one of the few states that pioneered the legalization of cannabis, laying down the framework for other states to follow, despite heavy resistance. For over 20 years, cannabis advocates have dedicated their time to the pursuit of cannabis legalization. In 2012, we finally began to see the results of their efforts.
Billions Worth of Tax Revenue
In the past decade, over 37 states have legalized medical cannabis, while 18 have allowed the use of recreational cannabis. Decriminalized cannabis has actually become a very significant revenue-generating industry in states where cannabis has been legalized.
To dive deeper into this: states that have allowed cannabis consumption have accumulated taxes worth approximately $8 billion in 2020 alone, the collective tax generated by legalized recreational cannabis was over $2.7 billion. From a dispensary like Planet 13, the leading cannabis entertainment complex, to a smaller Las Vegas dispensary – all players are bound to pay taxes on the revenue generated.
Tax Contribution of Different States In 2020
The various cannabis-legal states impose different tax laws and rates. A recent report by the Marijuana Policy Project (MPP) on the tax revenues paints a clear picture of the monetary benefit cannabis legalization brings to these states.
States like Colorado and Washington have been at the forefront of legalized cannabis sales, with tax revenues worth $1.5 billion and $2 billion, respectively. These numbers are constantly growing over time, making the legalized cannabis industry a highly lucrative business alternative for entrants.
The state of Washington has imposed a 37% tax rate on cannabis, leading to a significant tax revenue collection. Despite having a much higher number in alcohol use, the tax revenue generated from cannabis in this state was $400 million more than the revenue generated from alcohol in the 2019-2020 tax year.
Other states have also been developing policies to benefit from their legalized cannabis sector. For example, Alaska amassed a staggering $27 million tax revenue in 2020, its highest since legalization in 2016.
States like Michigan have been doing exceptionally well with their tax collection. After legalization in 2018, it managed to collect an astounding $81 million in 2020. Illinois’ figures surpass this, collecting $174 million in its first complete year after legalization.
Nevada Is Building Other Sectors Around Cannabis
While different states benefit from staggering cannabis sales, Nevada uses it to help other sectors to trigger growth for the state altogether. Since its legalization in 2017, Nevada has collected $374 million, out of which $25 million have already been collected in the 2020-2021 tax year. At this rate, Nevada is expected to break all previous records of tax collection in a financial year.
The state is using its tax collections to benefit other sectors as well. For instance, different local governments are allocated parts of the revenue generated from cannabis’ wholesale tax. However, a majority of this wholesale cannabis tax is allocated for developments in the state’s public education sector. Furthermore, the state’s rainy-day fund is given a major chunk of the tax revenues generated by Nevada’s retail cannabis sales.
Covid-19 Augmented Cannabis Sales
When almost every other industry was falling apart due to lockdown, the cannabis sector thrived, mostly due to the delivery services. Dispensaries took the opportunity to set up their delivery service to cater to both medical and adult-use customers. With the constant stress and barred lifestyles, people consumed more cannabis in the U.S. than ever before.
Cannabis Today
The past decade has seen a lot of states legalize recreational and medical cannabis. As a result, almost all states with a licensed and structured model for tax collection from the cannabis sector are thriving. In fact, leading states like Washington are enjoying massive influxes of revenue from their cannabis sector.
In short, no one can deny that legalizing cannabis has its monetary benefits in the form of tax revenues, which can further help build other state sectors, like in Nevada’s case.
If you are in Nevada and looking for high-quality cannabis products, visit Planet 13 in-store or browse our menu online. We provide a broad range of cannabis-based products from CBD oils to flower, vaporizers, edibles, and more. You can place your order online between 09:00 am and 12:00 am for delivery or curbside pickup, or just visit our largest cannabis entertainment complex in Las Vegas—we’re open 24/7.
Are you in Las Vegas? Come visit our store near the Las Vegas strip and shop at the largest cannabis entertainment complex, we are operational 24/7 for your convenience.
