Estimating What National Legalization of Cannabis Could Do For U.S. Economy by 2020
With 30 states having legalized some form of cannabis, plus the District of Columbia, speculating what national legalization would generate in tax revenue becomes a very relevant topic. The U.S. national debt is approaching $21 trillion so understanding the financial impact of legal marijuana is undoubtedly on officials minds.
While the United States debates about the potential harms of cannabis use and the morality of legalization, countries like Canada are taking the lead on marijuana. With national recreational sales set to begin sometime later this year, Canada already has exporting contracts for cannabis to Europe and other countries. The United States is bound to be the largest market for cannabis and could quickly step in and make marijuana a top commodity.
-New Frontier Data’s latest report, Cannabis in the U.S. Economy, shows how national legalization under a 15% federal cannabis tax would be a boon for the U.S. Treasury.
-Under full national legalization, by 2020 sales from plant-touching businesses (producers, processors, and retailers) would exceed $48 billion, generating nearly $11B in federal tax revenues from business taxes ($2.0B), payroll taxes ($4.1B) and a 15% federal retail cannabis tax ($4.8B).
-Such estimates are based on the growth of the industry under the current demand trajectory but do not include potentially significant added revenue from deregulation of CBD products, new cannabis-derived pharmaceuticals, or U.S. industrialization and commercialization of hemp.
-The updated report, which includes analysis of the newly passed tax law, is available here.
Based on the new tax law passed in December 2017, this report examines three aspects of what full legalization would look like in contrast to the current, state-by-state patchwork of legalized environments, and the anticipated impacts which full nationwide legalization would hold for the U.S. Treasury.
These three aspects include:
-Federal business taxes on cannabis businesses,
-Federal payroll withholdings
-Revenue generated from a national cannabis sales tax of 15%.
The report compares revenues that would be generated under the current state of legalization (forecast over 2017–2025) and a theoretical model of national legalization over the same period, assessing the impact on U.S. Treasury revenue and job creation in the industry. *Report is not released yet, this is a pre-order*
Attorney General Jeff Sessions recently made comments that the department of justice would not be pursuing small marijuana cases and the medical community is further embracing the medical benefits of cannabis. Do you believe that marijuana will be nationally legalized? When do you think it will happen?
Read more: NewFrontierData.com
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canadafederal business taxesfederal payroll withholdingsmarijuana salesnational cannabis sales taxnational debtnew frontier
