Massachusetts may be profiting from millions of dollars of tax income up till 2023 since the CN General Assembly did not approve marijuana legalization in Connecticut. The law package did not go through though revenue potentials have led many other states towards the legalization.
The latest report from the Pew Charitable Trusts offers a fresh look on the matter. It indicates that revenue coming from marijuana sales is unpredictable. It depends on many variables as well. The demand, the prices cut by the illicit markets, and the cross-border sales are factors to be considered when making revenue predictions. The report also suggests that as the markets mature, the revenue seems to shrink.
What we can learn from states that have legalized cannabis for strictly recreational use is that the programs can suffer and makers of the laws can find themselves in a predicament if the revenue does not meet the expectations.
The encouraging news comes from Washington State (population 7.5 million people), which gathered $420 million in tax revenue last year. Their neighbor Oregon has also gone full legal on cannabis. Moreover, the next couple of years are looking good for Massachusetts as it is becoming the regional marijuana hot spot. It seems that the Commonwealth will be exceeding the predictions in revenue and benefit immensely even in its first year of the legalization of retail sales for adults.
Latest tax report from Massachusetts implies that excise and sales taxes of 17% brought $22 million in the first seven months of the program. Towns like Great Barrington and Northampton that serve as a cannabis tourist getaway for CN and NY residents contribute with $3 million in LOST (local option sales tax.) The creator of the report is Commissioner Christopher Harding from the Department of Revenue.
Alaska and Nevada have seen handsome profits from the legalization. The income is mainly generated by tourists but is nevertheless substantial, according to the report from Pew Trusts. Nevada, where cannabis has been legal for over two years, even boasts the steady growth in related revenue.
Pew report advises that the shortfalls in the budget are avoidable if the state officials prudently use the new tax collections. It can also keep the funding of the program stable. As more and more information is available for budget staff and forecast experts, it should be easier to make the difference between short-term growth and sustainability marijuana sales can provide in the long run.
The support from Democrats was soft and the opposition from the Republicans fierce in Connecticut. So the General Assembly did not provide support for legalization. The situation is not likely to change in 2020 as well. The legislative sessions during an election year prove to be conservative. Massachusetts had a statewide referendum regarding the matter in 2016, but there is no such initiative in Connecticut.
One of the ideas circling is to put the legalization case before the state voters. It would have to be an amendment to the CN Constitution. The positive outcome in the House and the Senate would bring it to 2020 statewide ballot. Also, it would get on the next General Assembly in 2021 or 2022.
The legalization question has gone partisan, and it appears that there are not enough votes for it. This comes from Steve Stafstrom, who is one of the chairmen in the Judiciary Committee. He also worked on the legislature that failed in the Assembly this year.
Ned Lamont, CN Governor, made the legalization a big part of his campaign. However, once in the office, he hardly did anything to support the reforms. The projection of $180 million in tax-generated revenue did not seem to resonate with Lamont and his team.
Martin Looney, who is the Senate’s President (Pro Tempore), said that the reservations from the Assembly contradicted the residents’ support for legalization. He has been the pro-legalization voice for a long time.
The legislature does not seem to correspond with the public aptitude, according to Looney. But he sees a much bigger issue than the taxes. He draws a parallel with another social experiment: the prohibition. After the ban on alcohol was lifted in 1933, the police turned to marijuana prosecution. It was a way to keep their resources and persecute minorities in urban areas.
Looney continued with questioning a frequent presumption of the opponents that it is difficult to get marijuana illegally. In his opinion, the dialogue should remain open on the topic. Imposing the will is not a good idea if the issue is creating a societal division.
