Could the tax and gross revenue from marijuana sales pull the United States out of debt if all states took the same initiative in legalizing the use of cannabis for recreational purposes?

Andrew Frawley

Professor Dempsey

ENGL 1200-20

Project 2: Blog 2

5 April 2014

Blog Two: Could the tax and gross revenue from marijuana sales pull the United States out of debt if all states took the same initiative in legalizing the use of cannabis for recreational purposes?

            The discussion of whether or not to legalize the recreational use of marijuana has been a question among many states in America. Both the tax and gross revenue gained from marijuana stores in Colorado raises questions on what could happen for the economy of the country if every state decided to put marijuana through legislation. Giving citizens the freedom to buy marijuana from stores and legally allowing them to smoke (in a private setting) has fired up a large amount of debate since Colorado passed Amendment 64, becoming the first U.S. state to legalize the recreational use of marijuana for people of at least 21 years of age. The first official marijuana stores opened on January 1, 2014 in Denver, Colorado and business began immediately began to boom (Martinez, Michael). According to state revenue officials, the state of Colorado produces $2 million in tax revenue in only the month of January from its 59 recreational businesses (Messamore, W.E.). There recreational use of marijuana may be rejected by almost half of the United States, but there is no sustainable argument that can be made to deny the enormous increase in both tax and gross revenue that marijuana stores throughout Colorado have produced. The income of each marijuana business along with tax revenues could play a large role in helping the United States out of its debt, which is currently over $17 billion. The initiative taken by Colorado to legalize marijuana should be viewed as examples to other states, hopefully showing them the impact both the tax and gross revenue gained by marijuana businesses has already had and how every state doing the same thing could get the United States out of the debt crisis and improve overall economic performance.  

            When analyzing the overall economic advantages marijuana can provide, it is important to draw evidence from states that have already gone through the legalization process and who have had positive results. Colorado, for instance, produced $2 million tax revenue along with $12 gross revenue from the marijuana business across the state. Along with the large amount of revenue seen from marijuana sales, the legalization of this industry impacted a large amount of people from different parts of the United States to begin coming to Colorado in search of work, dubbed as Colorado’s “green rush” (Messamore, W.E.). The continuing increase of marijuana sales in Colorado gives an expectation of $1 billion in sales according to a budget proposal put forth by Governor John W. Hicklooper for next fiscal year. With the large amount of revenue gained from the sale of marijuana, Colorado has proposed to use $40 million in revenue to fund the construction of new schools and the other revenue put towards funding programs in health care, substance-abuse and public health (Poltonowicz, John). This is a perfect example of the different benefits the sale of marijuana can have for society in general. Using the revenue produced from marijuana stores to improve places for citizens makes light on the amount of progress that could be made in other aspects of society if all states decided to legalize marijuana.  Recent studies show how U.S. consumers of marijuana number from 25 to 60 million, depending on how truthful each person was in the survey. These statistics also show how the total spending on marijuana may add up to $45 billion to $110 billion a year (Easton, Stephen). This evidence gives an idea for the amount of revenue the United States could have if each state allowed marijuana to be recreationally sold. The large increases in revenue gained by two states in such a short period of time reflects the possibility of the United States getting out of debt and drastically improving the economy if every state decided to take the same initiative.

            The legalization of marijuana by every state would provide economic advantages and could potentially get the United States out of debt, but there are criticisms presented with any argument. The legal ability for people to recreationally use marijuana does come with the possibility of abuse. Of course, there has to be disadvantages if the drastic increase of revenue in both Colorado and Washington did not immediately influence every state to legalize the substance. Critics from CNBC who are against legalizing marijuana refer to the substance as the most commonly abused illegal drug in the United States and around the world. They also discuss the support for legalizing marijuana as failing to recognize the cost resulting from marijuana. One specific statistic putting marijuana use in a negative point of view from the CNBC Business section is how the criminal justice system identified it as an identified drug of abuse for 57 percent of individuals referred to treatment (Why We Should Not Legalize Marijuana). This information does give elements of abuse that can happen from people being able to smoke. The negative view of marijuana should be viewed next to a substance that is legal and more dangerous. The abuse seen with alcohol, although it is legal for people of the age 21 or older, can provide an argument for why marijuana is not legal. Marijuana not only has less negative effects than alcohol but the intake of too much alcohol can result in death, when marijuana does not cause fatalities. Although there is factual information given with why certain people have a negative point of view of the use of marijuana, but it is important to consider the contradiction of why marijuana is not legal when there is less of side effects and danger associated with it. giving reason for why marijuana should not be legalized, it overall provides less negative effects than those of alcohol. The small negative possibilities associated with marijuana should not be a valid reason to discount the increase in both revenue and economic activity the sales of the product have had in both the states that recreationally legalized it a short time ago.

            The legalization of marijuana has provided a large amount of benefits dealing with the economy. The different evidence seen with selling marijuana has made for an overall increase in revenue while accompanied with few disadvantages. The disadvantages or negative view of marijuana has held states back from going through the process of making the substance legal. States should not discount the negative effects marijuana can have or the possibility of it being abused, but there needs to be recognition of the abuse that comes along with alcohol and how it has showed to have a more negative effects than cannabis. The rest of the country needs to pay close attention to both Colorado and Washington and the economic increases associated with the sale of marijuana. If the United States as a whole was to actually analyze the impact marijuana could have on the debt situation and how it could greatly improve the country’s economy, more states would take the initiative to legalize marijuana and the American society could be changed forever.

Works Cited

CNBC. Business. “Why We Should Not Legalize Marijuana.” 20 April 2010. <http://www.cnbc.com/id/36267223>.

Easton, Stephen. Bloomberg BusinessWeek. “Legalize Marijuana for Tax Revenue.” “PRO: Fund crime-or taxes?” <http://www.businessweek.com/debateroom/archives/2010/03/legalize_marijuana_for_tax_revenue.html>.

IVN. “Colorado Recreational Marijuana Tax Revenue Hits $2 M in First Month.” <http://ivn.us/2014/03/15/colorado-recreational-marijuana-tax-revenue-hits-2m-first-month/>.

Martinez, Michael. CNN U.S. “10 things to know about nation’s first recreational marijuana shops in Colorado.” 1 January 2014. <http://www.cnn.com/2013/12/28/us/10-things-colorado-recreational-marijuana/>.

Poltonowicz, John. Liberty Voice. “Marijuana Sales in Colorado to Reach $1 Billion. 9 March 2014. <http://guardianlv.com/2014/03/marijuana-sales-in-colorado-to-reach-1-billion/>.