Legalized cannabis nationwide could create over $100 billion in tax revenue and over a million new jobs, according to findings from a new study.
According to New Frontier Data, a data analytics firm focused on the cannabis industry, legal cannabis in all 50 states could create a new tax revenue stream for the government. The immediate impact would include the creation of 782,000 new jobs, with the firm predicting that the number could grow to 1.1 million by 2025, including jobs in all aspects of the cannabis supply chain, from growers to transporters to retailers. The study shows that at least $131.8 billion could be created in federal tax revenue between 2017 and 2025 based on an estimated 15 percent retail sales tax, payroll tax deductions and business tax revenue.
“If cannabis businesses were legalized tomorrow and taxed as normal businesses with a standard 35 percent tax rate, cannabis businesses would infuse the U.S. economy with an additional $12.6 billion this year,” said Giadha Aguirre De Carcer, the CEO of New Frontier Data.
States where cannabis is legalized have already seen boosts to the job market as well as in state tax revenue. Colorado surpassed $1 billion in sales in only eight months in 2017, which equated to over $162 million in tax revenue for the state. California’s legal market is projected to be a $7 billion industry and will create thousands of jobs, including state and local government jobs. Other states with legalized recreational use also see a boost in tourism.
Nationwide legalization is looking unlikely under the Trump administration, with Attorney General Jeff Sessions’ opposition to statewide cannabis laws slowing the bipartisan push for federal legalization. Nearly 70 members of Congress have signed and sent a letter to the U.S. House of Representatives urging the inclusion of the McClintock-Polis Amendment, which would block the U.S. Department of Justice from using funds to interfere with any form of state-legal cannabis programs.