According to a new report from Pew Charitable Trusts, it is difficult to accurately anticipate monetary numbers of legal cannabis sales.
The report explains that due to a lack of longstanding data to work with, and the uncertainty of success in the cannabis industry, real data is nearly impossible to predict. “Given how unpredictable recreational marijuana is as a revenue source, states should adopt prudent policies for budgeting collections,” the report explains. “Treating it like other volatile or nonrecurring sources will reduce the chance of a budget imbalance if reality does not meet expectations. Forecasting revenue from a product that was illegal just a few years ago, and remains so under federal law and in most states, presents a unique challenge for state budget planning.”
As an example, the report explains that in Nevada’s first six months of legal cannabis sales, funding came in 40 percent higher than finance officials had expected, which is not surprising given how much the state sold. However, revenues from cannabis taxes in California were 45 percent below projections in the first six months. Thus, in both cases, it was hard to predict exactly how much revenue cannabis would bring in. Many believe that methods like surveys on cannabis use aren’t actually accurate ways of predicting.
“Sixty percent of Oregonians say they’ve had a drink in the last month. Twenty percent say they’ve used marijuana,” Josh Lehner, senior economist with Oregon’s Office of Economic Analysis, explained according to The Hartford Courant. “Does marijuana go all the way up there, where the majority of Oregonians say they’ve used it in the past month? That’s the big-picture uncertainty.”
While cannabis revenue is definitely unpredictable, it is almost always impressive. Recently, Colorado surpassed $1 billion in cannabis revenue, and Michigan projected collecting $130 million back in 2018. As the industry grows and cannabis is no longer a part of the black market, predictability will slowly become easier.