According to a report acquired by the Phoenix New Times, Arizona stands to gain $48 million in tax revenue annually by regulating marijuana like alcohol:
The Joint Legislative Budget Committee produced a report in September on the estimated impact of legal marijuana, but didn’t release the data publicly. New Times obtained a copy of the report this morning.
Prepared in response to a legalization bill proposed earlier this year by a group of Democrats, the JLBC report shows that Arizona could enjoy a large boost in revenue for schools, health care and other services simply by taxing people who already use marijuana.
The Democrats’ bill would have made marijuana legal for adults 21 and older, and would have allowed the plant to be sold in retail shops with an added $50-per-ounce tax.
The bill died in committee back in April, but a similar measure could be revived when the legislature reconvenes in January. Whether or not lawmakers do anything, Arizona voters are likely to see a legalization initiative on the ballot in 2016. Coordinated by the Marijuana Policy Project, the initiative is still in the drafting stage but will almost certainly include a tax-collection scheme.
Martin Nickerson has filed a federal lawsuit against the state of Washington, attempting to bar the state from collecting taxes on marijuana sales. Washington state officials are demanding that he pay taxes on those sales to the tune of $62,000. However, since Nickerson is under prosecution for the criminal sale of marijuana as a medical marijuana producer, he claims that forcing him to pay taxes on his sales would violate his constitutional right against self-incrimination.
Alison Holcomb, an attorney with the American Civil Liberties Union who was the main author of Washington State’s successful ballot initiative, said the lawsuit has a low probability of taking down the state’s legal marijuana system.
Suppliers like Nickerson have already made public their intent to break federal law, Holcomb said, so paying taxes on their proceeds would not do much to further incriminate them.
“Paying taxes on marijuana implicates you, but so does everything else about being engaged in this system,” she said.
Ultimately, the case brings into question whether federal laws trump state laws when it comes to collecting tax revenue generated from marijuana sales. The outcome of this case could have a significant impact on medical marijuana businesses around the country.
Colorado lawmakers moved the marijuana industry away from its cash-only roots on Wednesday when they approved the world’s first financial system for marijuana businesses. The plan sets up a network of uninsured cooperatives, which gives the industry an avenue to basic banking services.
Even in light of Eric Holder’s comments on banking, marijuana businesses have still had a hard time finding banks to even let them open checking accounts, for fear of committing a federal crime. According to an AP article by Kristen Wyatt, “Shop owners in the state say a small number of credit unions will do business with them, too, though no banks or credit unions have said so publicly.”
Colorado’s new plan for banking would let marijuana business pool money in cooperatives, which would let stores accept credit cards and checks. However, these co-ops would need U.S. Federal Reserve approval first.
The plan has bipartisan support, partially because it gives the state the ability to audit marijuana shops and make sure they are paying taxes. Even Gov. John Hickenlooper supports the plan, and has pledged to sign it into law once he receives the final language of the bill.
Establishing a co-op-based banking system for marijuana businesses reduces the risk of crime by moving large cash reserves out of stores and into banks. It makes the industry more accountable and establishes a system that other states can follow as they begin to tax and regulate marijuana.
The New Hampshire House Ways and Means Committee voted to amend HB 492, which would make marijuana legal and regulate it like alcohol, in order to simplify the tax structure and regulatory language. The committee then voted 14-5 to recommend that the House not pass the bill, which would also allow people 21 and older to possess up to an ounce of marijuana. The House is not bound by this recommendation, and will vote on whether the bill should progress to the Senate soon.
The committee’s amended bill taxes and regulates marijuana by imposing a standardized $60 per ounce tax on growers. Advocates claim the tax will generate approximately $25 to $30 million annually.
MPP’s Matt Simon commented that, “Even with a negative recommendation, this thoughtful amendment will make it much more likely that the bill will receive continued support from the rest of the Legislature. We are optimistic that New Hampshire lawmakers will recognize that their constituents do not want to see adults arrested for using a substance that is safer than alcohol.”
California was the pioneering state for medical marijuana, which was made legal in 1996, but since then has stalled on creating a regulatory structure for cultivation or sales, and the legislature has been unwilling to seriously consider making marijuana legal for adults.
Leading up to the party shift this weekend, Lt. Gov. Gavin Newsom, formerly the mayor of San Francisco, made the case for marijuana, swaying moderate Democrats by reassuring them, “You can be pro-regulation without being an advocate for drug use.”
Newsom’s advocacy was contrary to Gov. Brown’s interview on “Meet the Press” the last week, in which he voiced peculiar concerns over marijuana’s effect on alertness. “The world’s pretty dangerous, very competitive,” Brown said. “I think we need to stay alert, if not 24 hours a day, more than some of the potheads might be able to put together.”
The platform language specifically calls on Democrats to “support the legalization, regulation and taxation of marijuana, in a manner similar to that of tobacco or alcohol.” The tipping point in this shift may stem from Colorado’s preliminary tax revenue generation of $2 million dollars for the month of January. However, revenue clearly is not the only factor; a recent Field Poll found a 55% majority of voters support legalization.