Oct 272015
 October 27, 2015

washington state marijuana regulationsOne of the biggest arguments to legalize marijuana is that it will generate a lot of money. On one hand I like that argument because it seems to have gained a lot of traction in recent years, and the legalization movement has no doubt benefited as a result. However, on the other hand I don’t like that argument because I have always felt that a lot of people will only measure legalization’s success based off of how much money it generates.

Legalization is sound public policy either way, and even if ending marijuana prohibition resulted in zero dollars in tax revenue, the savings from not enforcing such a failed policy would be more than worth it. With that being said, many people out there have dollar signs in their visions, so it’s going to be very hard to convince people that legalization has worked unless it generates dollars, and lots of dollars at that. Bloomberg recently published an article in which it talks about Washington State’s Office of Financial Management and the projection that the office put out. Per Bloomberg:

Washington state expects marijuana sales taxes to bring in more than $1 billion over the next four years, according to a budget forecast published by the Office of Financial Management.

In the first year since legalizing both medical and recreational cannabis, Washington collected $67.5 million in marijuana-related taxes, directed toward its general fund and health-related services.

washington marijuana tax projections

(image via Bloomberg)

There is one very large factor that was omitted from the Bloomberg article – Oregon now allows limited recreational marijuana sales. Oregon’s marijuana is just as good as Washington’s (better if you ask some people), and it’s significantly cheaper. As the fall flood of outdoor marijuana pours into Oregon dispensaries, prices are about to plummet. Right now Oregon dispensaries can only sell flower (and clones and seeds), but next year they will be able to sell every marijuana product that is out there. A lot of Washington’s most successful marijuana stores are located along the Oregon/Washington border, and I guarantee many of them are already feeling the pinch.

That trend is only going to continue as more stores open in Oregon, more products are sold in those stores, and as a result, more and more people make their purchases in Oregon versus Washington. Washington will still bring in a good amount of money no doubt, but I think the state needs to temper its expectations. Marijuana will be taxed in Washington at a 37% rate, while Oregon will tax marijuana at a proposed 20% rate. Until that changes, people are going to choose Oregon over Washington more often than not when there is a choice between the two.

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  9 Responses to “Will Washington State Collect Over A Billion Dollars In Marijuana Taxes By 2019?”

  1.  

    I have to agree with Johnny and that states would still bennifit from a tax free legalization.Most of the taxes that state collect from Marijuana sales the could still collected from other non Marijuana sales. Or hear is a novel idea just let people save more money so that they can use it later or something. Just because some states did the right thing and legalized doesn’t mean they should rip people of in the process. Come on 37% total tax is corrupt at its best.
    I would hope and expect that those outrageous taxes will be lowered as the states funds increase. Remember they are states while it is great to have a debt free state, state are not supposed to profit at the end of the year.

  2.  

    People using untaxed tobacco have been killed. Will the same be true of weed?

  3.  

    Luckily we have competition coming in to to save the day. 37% tax is simply not competitive but let’s count our blessings, good on them for legalizing.

  4.  

    A debt free state would be nice and all states becoming debt free would be great if they don’t lose sight of where that money came from and where it’s going, the people. States don’t have to rob their citizens of such a high tax rate, even though Ohioans are faced w/some perplexing issues to vote on in November basically between mmj, recreational and monopolies, they still only propose a meager 5-15% tax to curb cartel competition. We can do this right unilaterally if states work together instead of competing because the world has proven that if you grow it they will come. It sells itself and while it should be free, I do see the benefits it can bring both financially and medicinally. I just don’t think it’s that big of a deal and we should all have the right to grow it ourselves w/out having to pay Any fees whatsoever. It only became illegal less than a hundred yrs ago because timber barons in the Oregon/Washington area became alarmed at the many many uses for hemp and marijuana that put their resource at risk so they got w/Sam and behold the “Reefer Madness ” smear campaign began. We know this.

  5.  

    For the general public, tax revenues from legal weed are understandably a secondary issue, but for cash-starved state legislatures that is a giant potential funding stream that could be used to shore up their budgets. For the 26 states without an initiative petition process, those state legislatures are the only hope of legalizing cannabis on a state level. The only other hope for the folks in those states is federal legalization, which is obviously still a ways off, and depending on how it’s written may not even invalidate current state bans.

  6.  

    We need action taken at the federal level immediately.
    Americans, including American Children, who need Medical Marijuana to ease their suffering or save their lives are suffering and dying — needlessly.
    Americans in all 50 states deserve the right to have safe, legal, access to Medical Marijuana, and they deserve the right to have safe, legal, access to it now.

  7.  

    Ahhhh, to be in such a position of tough choices, I would love to have that decision to make. The Pacific Coast, all up and down is the cannabis center of the world it seems.

  8.  

    Maybe along the border, but people from Seattle and the population centers of the Puget Sound and Spokane probably aren’t going to drive to Oregon. There just isn’t going to be that much of a difference to make it worth it.
    Washington has had a slow rollout of legalization for all adults because of a widespread, unregulated medical marijuana marketplace . that was much larger than Oregon’s, coupled with only allowing a limited number of retail stores for the new adult-use market. The unregulated marketplace becomes illegal July 2016 and those stores are already starting to shut down, seeing a gradual shift toward the adult-use market. Add to that, Washington just opened up the application process for retail stores again and is not limiting the number. Expect to see a huge increase in the adult-use market in Washington because of these factors over the next two years, despite Oregon’s adult-use market coming online. If anything, no doubt those Vancouver stores will see a decline as the Oregon users quit driving over there and more stores open in the area to compete with those who had previously won the lottery.

  9.  

    Huge difference over all. Oregon allows home grows, that will keep prices in check. Washington has a chokehold on recreational cannabis. Those best selling stores along the border will soon be hard hit. As time goes, home growing should help keep prices down in OR.

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