National Marijuana Tax Revenue — $25 Billion?

Update at Huffington Post.  And there’s a caveat about my numbers being gross (not net of a 280E repeal).

America would probaly not see $25 billion in marijuana taxes, but that’s a straight line extrapolation from the most official estimate around.  According to an official state Fiscal Note,[1] Washington State’s enacted I-502 will raise some $564 million in taxes in fiscal 2015.  Extrapolating that per capita estimate, the revenue figure for the nation would be over $25.7 billion.[2]   That number is too high, probably, but not by an order of magnitude.Any revenue might be split among the Federal Government and the States, if all jurisdictions tax.

I don’t believe the Fiscal Note, for reasons explained in some detail in “Gangs, Ganjapreneurs, or Government: Marijuana Revenue up for Grabs,” State Tax Notes, Volume 66, Number 4, pages 255-269 (October 22, 2012), online at and  I think the estimate for Washington is too high.  But I think Washington’s tax rate is too low, and leaves money on the table.

Everything depends on the nature of taxes and suppression of evaders.  I think it would be a stretch to bring in $25 billion for the nation, but that number is not an order of magnitude wrong.

[1] Multiple Agency Fiscal Note Summary, Bill 502 XIL, Mar. 20, 2012, available at [hereinafter “Fiscal Note”].  That estimate exceeds the expectations of supporters of the initiative, who predicted total revenues of some $215 million a year.  New Approach Washington, “Factsheet: A Public Health Approach to Marijuana Use,” (Feb. 17, 2012).

[2] The federal 2011 population estimate for Washington is 6,830,038. (last visited May 13, 2012).  The per capita revenue figure is thus $82.59.  The estimated population of the United States is 311,591,917.  Id.


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