The legalization of cannabis is underway, and it’s an unstoppable trend. And that means one of two things will happen:
1) Every state will individually legalize weed for BOTH medical and recreational use
2) The federal government will finally take decisive action and legalize weed
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States across the country are realizing the grave reality: Slow economic growth, stagnant wage growth, and increasing expenses are making it difficult to balance state budgets.
New sources of revenue could be the solution. And in Colorado, Washington, Oregon, Alaska and Nevada, the local governments are embracing legal cannabis as one new revenue stream.
Colorado Earns $199 Million in Tax Revenues
Let’s take a look at how legalization is working out in the Centennial State.
Colorado was the first mover on legalization. 2016 marked the state’s third year of selling weed for recreational use. Here’s how sales have stacked up:
- 2014: $699 million
- 2015: $996 million (+42%)
- 2016: $1.3 billion (+31%)
Two-thirds of Colorado sales are generated from recreational use, with the balance being medical patients.
The Colorado Department of Revenue reports $199 million in tax revenue last year. And Forbes reports that tax revenue from cannabis has been greater than alcohol taxes.
The state of Washington is also bringing in big revenue from pot. Last year, Washington state earned $185 million in taxes.
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Nevada Gets in On the Action
The latest state to get in on the tax revenue gravy train is Nevada. After citizens passed a referendum in 2016, Nevada rushed to meet a July 1 deadline on recreational use.
Las Vegas attracts 40 million visitors every year. The state plans to offset its budget shortfall by legalizing weed and selling it to tourists. It’ll be yet another way for visitors to the desert oasis to spend their hard-earned cash.
Initial estimates were for $75 million in sales in the second half of this year. And growth projections call for $450 million to $500 million within a few years.
However, sales of $3 million during Nevada’s first weekend blew past expectations. And that may set the stage for stronger sales in 2017 and beyond.
Will Donald Trump Legalize Weed?
Ackrell Capital – a San Francisco research firm – projects that the Federal Government will fully legalize weed in the year 2020.
Complete legalization would be in line with the views of most Americans. Some 60% support the full legalization for both medical and recreational use. That’s a full five-point increase in the last year, according to Gallup.
Today, it’s difficult for foresee President Trump and Republican-controlled Congress taking initiative to legalize weed. Yet mid-term elections in 2018 could change dynamics on Capitol Hill, and the outcome of the 2020 presidential election is anyone’s guess.
Honestly, it doesn’t matter if the federal government continues to drag its feet on the inevitable. Because each and every state will eventually get on board.
It’s happening right now. In Colorado, Washington, Oregon, Alaska and Nevada, it is legal for a 21-year-old to walk into a store and purchase cannabis without a medical prescription.
And California, Massachusetts, Maine and the District of Columbia have already approved recreational use via referendum. Yet sales aren’t expected to begin until 2018.
Tax revenue shortfalls and support for legalization from Americans will force more states to legalize cannabis.
It’s simply a matter of time before every state takes action . . . or the federal government decides to finally get something done. Until then, we’ll wait patiently and get positioned for the inevitable.
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