Forbes reports that California's marijuana market stocks soared on the first open trading day of the year, after California legalized retail sales of the drug and became the largest legal market in the US.
California's Proposition 64 allows for citizens over 21 years of age to possess up to one ounce and grow up to six plants privately. With the legalization, these clients are flooding dispensaries and enjoying legal recreational use.
ArcView Market Research released an in-depth industry report that states more than $1 billion in wholesale, excise and cannabis-specific sales taxes were taken into state treasuries during 2016 but experts expect this will grow to just over $1.4 billion in 2017, then almost $2.8 billion by 2021. The report says with additional state and local general sales taxes, the final 2021 amount could fall between $4 billion and $4.7 billion.
Researchers assert that sales taxes in state-sanctioned Colorado, Washington and Oregon cannabis markets totaled more than $500 million in 2016 and $836 million since adult-use sales began in 2014. Many other US states are looking to capitalize. So far, nine states have legalized recreational use and 29 states have legalized the use of medicinal marijuana.
In December, Forbes reported that Nevada has benefited from nearly $20 million in tax revenue since July when adult use became legal, surpassing Colorado in sales. Alaska, Washington DC, Massachusetts, Maine, Oregon, and Washington all continue to see increasing amounts of sales tax collections following the legalization of adult use of marijuana.
Colorado's more than $100 million in tax revenue is reportedly going to their "Marijuana Tax Cash Fund" which is aimed at addressing issues such as homelessness, mental health problems, education and more. In Washington, more than $168 million in cannabis excise tax is used to fund Medicaid, drug education, substance abuse prevention and other public services. And Alaska has collected $964,900 from October to April and is using the revenue to fund comprehensive criminal reform.
More states are expected to revamp drug laws and move in the direction of legalization.