U.S. States Make More Money On Cannabis Tax Revenue
Peter Sayles |
It’s no secret cannabis is one of the hottest markets in the news today.
Everyone knows about it by now. Everyone knows it’s a trend that’s exploding like 5G. Driverless cars. The internet of things (IOT). Or virtual and augmented reality.
But it doesn’t mean the easy money has been made yet. It’s still in its infancy.
There is – and will be – hundreds of opportunities to make huge sums of money by investing in the cannabis trend.
(Click here to read our #1 cannabis stock we think has 500% upside).
The United States will undoubtedly be the biggest growth driver for cannabis stocks.
Ten states have fully legalized cannabis. Medical cannabis is legalized in 33 states (66% of the U.S.)
We presume cannabis will be fully legal within the next five years.
Why? The majority of Americans are in favor of legalizing cannabis. And there’s too much money to be made by the government via tax revenues.
Pew Research states 62% of Americans want to fully legalize marijuana – up from 30% in 2000. All generations except for the “Silent Generation” favor legalization.
Local governments can push back all they want. But they’ll change their minds soon enough.
The American people want it. And once they look at their neighboring states who are raking in the cash, they’ll pass it asap.
Governments Love The Cannabis Tax Revenues Coming In
Governments continue to underestimate the demand for cannabis.
Take Colorado for example.
Colorado expected $98 million in tax revenue for fiscal 2015… up from its original $70 million forecast.
How much did Colorado earn in cannabis tax revenue for fiscal 2015? $130 million.
The forecasts for longer term weren’t much better. Economic forecasters expected $190 million in cannabis tax revenue over four years starting 2015.
How much tax revenue has Colorado brought in through September 2018? Over $770 million.
Other states are exceeding their projections too.
Montana doubled its fiscal 2018 projections in cannabis tax revenue – collecting $1.8 million on $45 million in sales.
Montana’s state revenue director Gene Walborn said, “We were pleasantly surprised on how well it went. It being a new tax, we were concerned what challenges you receive with a new tax.”
Oregon continues to see its tax revenues go up and to the right.
It collected $60.1 million in state tax through 2016. $68 million in 2017. And $94.2 million in 2018. It collected another $14.5 million in local taxes too.
Oregon expects $222 million in taxes from fiscal 2019-2022.
But Oregon will collect almost $283 million in tax revenues over the next three years if revenues stay flat.
Nevada collected $69.8 million in cannabis tax revenue during the first fiscal year (2017) – 140% of what it estimated. It collected $6.5 million in the last four months of 2018 fiscal year – an annual rate of $78 million.
Fiscal 2019 looks even better. Nevada’s cannabis taxes $31 million through the first four months of fiscal 2019 (starting July 2018). It’s met half of its annual projections in the first four months.
California’s tax revenue came in 50% lower than expected. It only brought in $345 million in tax revenue last year – versus expectations of $643 million.
Many people would look at California’s miss as a sign things aren’t going so well for cannabis growth. But we think it’s more due to California’s overbearing legislation of cannabis.
Dale Gieringer – director of California NORML, a pro-legalization group – said: “It’s impossible to solve all of the problems without a drastic rewrite of the law, which is not in the cards for the foreseeable future.”
But overall, the data and estimates are undeniable.
Conclusion: Cannabis Tax Revenues Are Too Good To Pass Up
State and local taxes collected more than $1 billion in taxes from cannabis – a 57% increase over 2017.
These states have matched the taxes collected from alcohol sales – $1.04 billion from cannabis vs. $1.16 billion from alcohol.
The report also states the U.S. would collect almost $12 billion in annual tax revenue if it was approved nationwide.
New Frontier Data – an independent and unbiased cannabis research firm – suggested legalizing cannabis nationwide could bring in $132 billion in tax revenue and create 1 million jobs over the next decade.
We’re not sure how many politicians there are left that would turn down this proposition.