How often do you hear about government underestimating something like taxes or the amount of money required to complete a project? If you answered “never,” you probably think like most people.
As crazy as it sounds, when it comes to the tax revenue generated by legal marijuana in Washington State, everyone has been wrong; the revenue has far exceeded initial estimates. According to a Jan. 22 story in The Seattle Times, taxes from cannabis sales were originally estimated to be $374 million for the 2016-17 budget period, which ends in June. However, according to the latest revenue numbers from the Washington Office of Financial Management, the state is actually on track to collect nearly $472 million in marijuana taxes for the period. That’s nearly $100 million more than forecast!
It gets better: For the 2018-19 budget, taxes were originally projected at $695 million, and has now been revised to $730 million.
Meanwhile, with a much smaller sample size and still developing market, Oregon has also seen higher-than-projected marijuana tax revenue. According to the Oregon Department of Revenue, the state collected $60.2 million worth of marijuana taxes in 2016 — about six times more than originally estimated. Colorado’s boom has also continued with more than $1 billion worth of cannabis sold in 2016.
When you combine the tax revenue with lowered enforcement costs (police), job creation in both rural and urban areas and all the other fiscal benefits, it seems quite likely that cannabis will have a multi-billion-dollar impact on the Pacific Northwest alone. That’s revenue that can go toward education, Medicaid, substance abuse treatment and other social programs and infrastructure.