Drug Policy

Infographic on Pot Tax Revenues

|

In May, Reason's own Nick Gillespie crunched some numbers (and perhaps a Cheeto or two) on the possible tax revenue from marijuana legalization. Now, some numbers along the same lines, in sexy infographic form!

a new meaning to "CBO score"?

Via BoingBoing

NEXT: L.A. City Council Members Say Collectives Can Sell Marijuana

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. That infographic is blank on my computer.

    Is there a subtle message?

  2. I’m always confused by the notion that taxation of pot is a reasonable outcome once it’s legalized. Is this because there’s no way to avoid the taxation regime once pot becomes a legal product, up for sale? Or is it because illustrating tax revenues is one of the best ways to demonstrate pot’s value to the taxation regime?

    1. Both, Andrew. Both.

    2. I already pay a Pot. TAX. My …”I can smoke because a good Dr in WA says I can…” Cost me 180$ every year. granted it goes to THCF, but its still a “tax”.

      1. that’s not a tax, that’s protection money.

      2. dude, your getting way over charged. i get mine for 80

        1. Damn! I paid $180 initially but only pay $25 per year.

    3. First off, there are entities controlling our world that are more powerful than sovereign governments and want nothing to do with taxes at all. They’re called multinational corporations, and they work alongside governments (or against them) in order to spread the practice of “free market” capitalism.

      Marijuana is illegal because MNCs and governments are currently able to derive more profit and control from the War on Drugs than they would able to were drugs like marijuana legal.

      Legalizing marijuana would shift a lot of profit margins (for example, away from private prisons and into the legal marijuana trade). Businesses with an interest in these profit margins do not want this.

      Hence, appealing to government on the basis of failed policy and potential state revenue SEEMS a reasonable enough approach to legalizing, but really isn’t for the fact that other people’s interests (namely, those of business) are being heard before the People’s.

      1. Amen! Surely the answer lies in the hands of the pharmaceutical business. Although they stand as one of the largest legislative oppositions to legalization they could be its ultimate savior! Taxation is certainly one way to capitalize but as mentioned by this insightful young man above it is privatization and big business that stand to lose or gain. If the pharmaceutical industry was able to profit by producing and distributing pharmaceutically made hydroponic strains of marijuana they just might find their biggest cash crop yet. It could possibly even become one of America’s largest exports solving yet another problem we face daily. Appeal to the government through their biggest contributors, lobbyist and law makers by proposing what is nearest and dearest to their hearts, Money. It is unfortunate that marijuana can not be made legal by its own rights being the wonderful plant that it is but in this country Money Talks and usually wins!

  3. Geez, I couldn’t beat it. When someone suggests “hey, we should legalize pot, I mean come on statists, think of the tax revenue” absolutists predictably come forth to say “bah, taxation bad!”

    Yes, yes, ideally there would be untaxed pot. But legal and taxed pot is a definite step in the right direction! Don’t let the perfect be the enemy of the good…

    1. For me at least, that depends if we’re talking about a normal sales tax rate, or some obnoxiously high tax similar to that which alcohol and tobacco suffer these days. But let’s not kid ourselves. I doubt very many libertarians, maybe not even LibertyMike, would vote against a “decriminalize and heavily tax” measure because though it increases taxes, it does increase freedom.

    2. Don’t let the perfect be the enemy of the good.

      Yes, but by that token — not to go too off topic — it is good that gay marriage becomes universal, but it is perfect that the state has no role in defining or legislating any kind of marriage. Are we freer as a whole if the government can now use its power to regulate/price control pot so that the ADMs of the world make gargantuan profits that are now fully available to the illegal entrepreneurs who grow/distribute pot? Seems that the freest route is simply decriminalization. What am I missing? (Answer to my own question: we’ll take what we can get.)

    3. Let us keep in mind that it is a weed, and easily grown

      1. just because some people call the plant “weed” doesn’t mean it is one.there are tons of slang names. a real weed sucks up all the water it can so other plants can’t get any. “weed” doesn’t do any of that kinda crap

      2. just because some people call the plant “weed” doesn’t mean it is one.there are tons of slang names. a real weed sucks up all the water it can so other plants can’t get any. “weed” doesn’t do any of that kinda crap

        1. Let us keep in mind that it is pot, and we can grow nice plants or keep oodles of honey in them

        2. Let us keep in mind that it is pot, and we can grow nice plants or keep oodles of honey in them

      3. ya, your a fucking idiot. do research before you make an asshat of yourself.

  4. Speaking of non-medicinal use, I think it’s inevitable. I’m just some nobody on the internet, but that’s my opinion.

  5. Bill O’Reilly wants you people nowhere near his family.

    1. I want to be nowhere near Bill O’Reilly or his family.

      1. Bill O’Reilly has a family?

        1. what’s a Bill O’Reilly and why does it matter?

          1. Bill O’Reilly should be taxed for every word that comes out of his mouth!

            1. Purple monkey dishwasher

    2. I did not know it was legal for Bill O’Reilly to breed. I gues it is legal, but really should not be. Nobody that closed minded should ever be able to produce offspring legaly.

  6. The “density” map clearly just uses statewide numbers, but with a little soft focus added to make people think on first glance that it might actually represent local density.

    1. The irony is that it was driving through North Dakota (very low density) that I heard a pretty serious discussion on conservative talk radio suggesting that marijuana decriminalization was an overreach of government power.

    2. Yeah. The density is not as high in Panhandle as in the Metroplex, I don’t care what they say.

  7. Wow, there are a lot of pot smokers in Texas.

    1. LOL. Yeah, you can see the outline of the state.

  8. Andrew – if it’s legal, and you grow your own, you might well be able to avoid taxes on it. Most states have tax-free home brew (of course, you probably pay sales tax on the ingredients).

    1. Well that’s if you can get the garden supplies. In WA they have made it essentially illegal to sell certain Air filters set up for large fans, as they” the GOVT of WA” feels that they are only used for “illegal” purposes. Not perhaps that most fertilizers smell like shit, and you don’t want your house smelling like bat poop, Regardless of what you are or not growing.

      Its not Illegal to sell them, however the Monkeys in Olympia called all of the “indoor garden shops” and told them to pull the filters, Unless they( The garden stores) wanted a “review” of their business license.

      1. Medic – that’s the point of my first three words. If it’s legal, all that idiocy goes away.

  9. pfft, us Alaskan pot smokers feel so left out, nobody ever counts us.

  10. Interesting graphic. Does “Marijuana Related” include violent crimes related to protecting the trafficking of marijuana? If not, you could probably see the “violent crime” category go down upon legalization as well.

  11. (1) Should libertarians be pushing the idea that pot legalization would be good for the bottom line of the state? After all, experience tells us were the government isn’t going to cut other taxes when it has a shiny new slush fund that nobody cares about. More money for government, especially money that comes with no strong negative feedback, simply feeds the power of the state.

    (2) I think the numbers on marijuana revenue are highly fanciful. If marijuana is sold at anything close to its free-market value, it will be so cheap it will not produce much revenue. If they set the price high enough to produce significant revenue it will generate a black market and we’ll be right back where we started.

    1. You’re hovering dangerously near my bailiwick, Shannon.

      One of my complaints about the neo-libertarian angle on drug legalization vis-a-vis Marijuana Medicalization, is it’s basically a cry of: Make us legit! Tax us! Regulate us! Set us free! Given what we’ve seen out of our government once they get their hooks into something they define as an ‘industry’, I’m really not keen on the notion that we’ll enrich the state if they allow, oversee, regulate and control the sale and manufacture of marijuana.

      As for your second point, you’re engaging in the same conjecture. The “real” price of marijuana, like liquor will probably range depending on demand, quality and marketing. Assuming of course a relatively unregulated and free market.

      Some will be dirt cheap (think: Pabst Blue Ribbon) and some will be very expensive (see Dom Perignon)

      1. PABST= Mexican Shake

        Blue Goose: GDaddy purple.

  12. Shannon, 1) at this point, it really doesn’t matter whether the government can raise the money or not. It’s going to spend it until we can convince enough voters that this is a bad, bad idea. Adding some cash to the money pit isn’t going to matter one way or the other – except it might help start a crack in the war on drugs.

    2) You’re probably right that it won’t raise nearly as much as the current estimates. I think that’s great. For once, I’d like to be on the “fuck-you” end of bullshit revenue projections.

  13. I phrased 1) pretty poorly – my point was that government will keep spending regardless of the amount of revenue they take until solvency becomes a popular political concern. Meanwhile, legalizing marijuana would show some people that the world wouldn’t end if some other drugs we legalized.

    1. Call me crazy, but I rather prefer the way its currently handled in California to whatever taxation happy alternative would spring up if the gubmint got their mangy fingers on it. Here in california, if you do get popped with the ganja, its less than a traffic ticket, and 90% of the time the cops won’t bother even citing you with that. I think the risk of getting a $100 fine once every decade is a better trade of than paying the state of california a c-note a month for your habit.

      1. in Fl, i had half a g of shake and $2400.00, Im still in my 24 week class learning that a negative side effect of weed is, and I quote… “inappropriate happiness”. Lets follow Mexico and just decriminalize and end this madness…

  14. Not that this sort of argument is particularly convincing to gov’t officials & the like, but I can’t wait to see all the sweet-ass innovations and competition that will come about as a result of legalization. Forget the pitiful tax revenues, we’re talking serious economic growth with weed-related tourism, boutique products, good ol’ American competitive spirit to out-do BC Bud to the North.

  15. Shannon,

    1) What is the market value of marijuana? Nobody knows, because there hasn’t been a market for it in decades. So you’re fighting out-the-ass statistics with out-the-ass assertions.

    2) Marijuana is not a commodity. It can be produced in different varieties and potencies, and sold for different prices.

    3) The price of a soft drink at McDonalds is $0.99. Taxing it doesn’t bring in much revenue, but they do it anyway, probably just for the hell of it.

    1. 1) What is the market value of marijuana? Nobody knows, because there hasn’t been a market for it in decades. So you’re fighting out-the-ass statistics with out-the-ass assertions.

      Kind of. Yes, I agree (see my post above) that she’s fighting dubious stastics with the sword of conjecture, but there is a market price for Marijuana. I don’t know what it is, but just because it’s not a legal, above board, regulated and government approved market for it, doesn’t mean it lacks a real price.

      1. From a grower it can range from 25-30$ 8th. From a “Clinic” 55-80$ for an 8th.

        Basic “Pharmacist” 40-50$.

        Quality and Strain play a lot in to the selling.

        an OG SD Kush will get 55$ in SD, and pull 75$ in WA.

        Well at least thats what I am “told”

        1. Current “market” prices vary from city to city, because its generally $40 an 1/8 in Seattle no matter what type

    2. I can safely assert that the theoretical l free-market price for marijuana would be dirt cheap because we use to grow millions of tons of hemp a year for use in cheap commodities like rope, paper and sacking. Hemp was so cheap, the base unit of sale was the ton.

      There is no reason recreational/medicinal marijuana could not be grown just as cheaply on a large scale. If grown on a large scale using modern farming techniques you could easily produce it for a couple of dollars a dry pound at most. Add in refining, packaging etc and you’re talking maybe $10 a dry pound.

      There’s a lot of mystique that has grown up around pot but in the end its just a hardy plant that grows readily and is easy to harvest and process. The only reason it is expensive now is that it is illegal.

      1. There is a giant difference between hemp and, for lack of a better term, marijuana. If you want sensimillia/seedless buds, you have to root out all the males before they flower as well as any hermaphrodites. Ideally, you will trim as much of the stems and stalks away as possible as well as the leaves which give a harsher smoke (I think there are machines available to do that, thanks to the Dutch, otherwise you have to do it by hand). Ideally you’d also cure it to give a better smoking experience. Each of these steps removes vegetative mass (curing will remove water weight) and increases the cost. Commercial marijuana would be cheaper than black market, I believe, but it won’t be as cheap as tobacco, for instance.

  16. legalizing marijuana would show some people that the world wouldn’t end if some other drugs we legalized.

    Hah!

  17. Some states – like mine – take a both/and approach. They make marijuana use (and other drug use) a crime, *and* they impose taxes on it.

    My state’s law requires drug dealers/users to buy special tax stamps to put on their drugs. You can buy these tax stamps anonymously (supposedly avoiding the risk of arrest), but it seems few people actually buy the stamps.

    When the cops arrest an alleged drug offender, they check the drugs to see if there are tax stamps on them. If not, then the tax authorities get into the game, sending the defendant an administrative tax assessment. The criminal proceeding and the tax proceeding are independent of each other, so that even if the criminal charges are dropped, the administrative tax proceeding continues.

  18. Propaganda distributed by those who don’t love America.

  19. Do they TAX ‘regular’ pharmaceuticals when you get them at the Pharmacy? I don’t recall, or maybe its because I’ve never picked up a prescription drug before? hmm

    Is there a Viagra Tax?

    I’m curious to know if insurances would cover the cost of prescription cannabis.

    1. AFIK, no. In every state in which I’ve lived and/or filled prescriptions, they’ve been exempt from sales taxes. With proper receipts, you can deduct Rx purchases as part of your medical expenses on federal tax returns… to a point.

  20. Decriminalization, imho, doesn’t go far enough, because most people are only talking about decriminalizing possession. That keeps the supply side criminal and does blessed little to help clean up the carnage of the War on Drugs. Consider Alaska: one ounce of cannabis possessed within a private residence won’t garner you criminal charges, but if you’re not growing your own, you’re still buying it in the ‘criminal’ realm and the drug warriors will still slap your ass down any way they can.

  21. Texas is stoner heaven. Who knew?

    1. Pantera

  22. F*ck legalizing, and taxing, I like it the way it is now, billions in tax free income, and if we cut out kids being able to score, there go the profits, well, at least half the clientele, dudes that’s bad for business. Plus, I wont need half my guns.

    1. Nice one there DEA magnet..

    2. Thanks for that bit of idiocricy. No seriously, you just showed a great example of propaganda in motion. You are the epitome of the reason we are not legally smoking right now. If you are a criminal you will remain one. It is the sane non criminal tax paying citizens who must unite and abolish stupidity on every level!

  23. It is the stigma that scares many people who use smoking pipes to keep it a secret. One of the problems inhibiting legalization is that people who smoke a glass pipe are not considered serious or mature. It is the public to make our choices known and to make sure our voices are heard. With the economy the way it is today this is the best chance to change the law. Send a letter make, send an email make a phone call, every hand written Letter that makes it to a representative is considered to be the voice of thousands of people who did not take the time to write and that is a power we all have.
    Sunflowerpipes.com

  24. It is the stigma that scares many people who use smoking pipes to keep it a secret. One of the problems inhibiting legalization is that people who smoke a glass pipe are not considered serious or mature. It is the public to make our choices known and to make sure our voices are heard. With the economy the way it is today this is the best chance to change the law. Send a letter make, send an email make a phone call, every hand written Letter that makes it to a representative is considered to be the voice of thousands of people who did not take the time to write and that is a power we all have.
    SunflowerPipes.com

  25. It is the stigma that scares many people who use smoking pipes to keep it a secret. One of the problems inhibiting legalization is that people who smoke a glass pipe are not considered serious or mature. It is the public to make our choices known and to make sure our voices are heard. With the economy the way it is today this is the best chance to change the law. Send a letter make, send an email make a phone call, every hand written Letter that makes it to a representative is considered to be the voice of thousands of people who did not take the time to write and that is a power we all have.

  26. Somehow I don’t think trying tol solve California’s budget crisis by selling pot to 12 year olds is an effective argument.

  27. Valid medicinal value, it’s a victimless crime, the War on Drugs WAY too costly, too many arrests for simple possession, tax it and use the money to pay for health insurance and to reduce the deficit?Need I say more?

    Woodstock Universe supports legalization of Marijuana.

    We will giveaway a Woodstock Universe Prize Package to the best member blog on “Why we should legalize marijuana?”

    Prize package includes Woodstock Universe T-shirt and magnet, WDST decal, Radio Woodstock Live in Woodstock CD and Woodstock 3 days of peace and music Director’s Cut DVD.

    Join Woodstock Universe to blog.

    Add your vote in our poll about legalization at:
    http://www.woodstockuniverse.com.

    Current poll results?97% for legalization, 3% against.

    Peace, love, music, one world,
    RFWoodstock

  28. holy shit, try to follow that infographic whilst being totally baked… fuckin rad

  29. Oregon should be much MUCH brighter green.

  30. How I love Canada…you can smoke in front of the cops and they won’t do a thing!

  31. For the people who were saying the government doesn’t have the right to decriminalize, THEY SHOULDN’T HAVE THE RIGHT TO MAKE WEED ILLEGEAL IN THE FIRST PLACE. I could get the exact quote, but it states in the constitution, more or less, that we are aloud to do whatever to our bodies as long as it doesn’t affect others. Government can contort anything they want, because we have little power over lots of things.

  32. Chris top her said – “holy shit, try to follow that infographic whilst being totally baked… fuckin rad ”

    (I can only hope this is sarcasm)

    But if not, You probably haven’t smoked based on that sentence, and even if you do and you felt the need to post that message, your an idiot and you give smokers a bad rep.

    1. you’re you’re you’re

      YOU ARE = you’re

  33. And thirdly, this didn’t get much coverage, but weed is now legal in Brekenridge Colorado, and we’re expecting neighboring towns to follow suit.

  34. It would be nice to see the tax rates that were used to come up with those figures. I mean, are they assuming just sales tax? Or are they guessing at a higher tax rate? To me, it is almost certain that legalized marijuana would have some kind of “sin tax” associated with it as does alcohol and tobacco.

    The website says “taxed like any other agricultural product” but both cigarettes and cans of creamed corn are value added agricultural products and they are taxed very differently.

    It’s hard evaluate the rationality of the revenue assumptions without that information.

    1. Then the revenue for the state would be higher. Seems pretty rational to me.

  35. Here in Oakland CA, or “Oaksterdam” as some like to call it, we have a VERY organized group of people leading the charge to get California’s “Tax and Regulate” proposition on the ballot. Legalization looks more and more likely here as time goes on.

  36. are they basing the marijuana habitual user map off of arrests? cause oregon is full of stoners while texas isn’t known to be, yet it’s all bright green?

  37. Some people said earlier they believed the tax revenue statistics are a little overblown. I’m thinking they may actually be underestimates.
    I live in Canada, and as most of you may know we have one of the highest marijuana usage rates in the world (the highest in any industrialized country afaik). Last I heard (from maclean’s magazine), the British Columbia marijuana industry was at least a $5 billion dollar industry, if not more. We’re talking just british columbia here, with a population of about 4 and a half million. A 10% tax on that, which is a very conservative estimate (its higher on alcohol and cigarettes), would be $500 million, right? Thats for BC ALONE. California has a higher population than my entire country combined, and presumably a fairly high marijuana usage rate. Probably not as high as BC, but factor in having 8 times the population and logically, their tax revenue should be bigger than the $105 million posted here. Say, hypothetically, that california’s pot smoking rate is 1/2 of BC. I don’t know what it actually is, I’m just guessing. BC’s pot smoking rate is about 1 in 10 habitual users. say california is 1 in 20… thats still 1.8 million people, more pot smokers than BC. So wouldnt it be logical to assume that the pot industry in california is likely a multi-billion dollar industry and will also likely be taxed at higher than 10% if it was legalized?

    Thats just my 2 cents on that subject. I could rant about this for hours on end. Marijuana must be legalized. Personally, I believe that arguments to “keep the status quo” because it keeps money out of the hands of the government is ridiculous. Something being taxed is a small price to pay for JUSTICE. Hundreds of thousands in my country, likely millions in the states, are wrongly made into criminals because of a law and a fallacy that the majority of citizens seem to have no desire to change. The repercussions go far beyond that. Teenagers and grown people alike are taught by their countries laws to believe that they are criminals, and so also believe it is ok to do other criminal things, associate with criminals, lead a criminal lifestyle. This is so widespread it is practically a part of our culture (american, canadian, western, and soon to be the whole world’s in my opinion). I shit you not. Here is my proof: Fist bumping. You all know what it is right? Some people call it props or whatever, its how we all greet each other now a days. My generation anyway. You know where that tradition started? IN AMERICAN PRISONS. Prisoners would do as a greeting instead of shaking hands to avoid the possibility of being harassed by guards for passing off drugs (it is impossible to pass off drugs with a fist bump, whereas it is possible with a handshake). It is no coincidence this prison tradition took off in civilian society. We all (drug users) are all raised by our state to consider ourselves as being criminals. We associate with other criminals our whole lives, us and our friends are all criminals in the eyes of our country. And so, we are more likely to move on to other criminal activities because are are simply not afraid of it at all.

    That is my quick explanation of why marijuana must be legalized.

    To the dude who said earlier “holy shit, try to follow that infographic whilst being totally baked… fuckin rad”: You’re making a joke out of my habit, jerkoff, and its not a funny one. I’m baked right now and I don’t sound fucking braindead.

  38. Geez, Black Bart, it’s still that low in Seattle? I used to live in Snohomish and Kitsap County, and work in Seattle. Been in Texas 3 years. Problem here is not being able to find near the quality as in WA.-almost a waste. Hopefully, legalization would help that matter. Seems like it’s just going to take it’s sweet time getting legalized in this state.

Please to post comments

Comments are closed.