While Illinois State lawmakers are looking to legalize medical marijuana for around 10,000 Illinois patients in need, several states have had similar laws in place for years. In fact, Colorado (as well as Washington) not only legalized medical marijuana, but allow marijuana to be used for recreational purposes.
Colorado marijuana state laws have recently made the news when State Officials scaled back prior estimates about the state’s retail marijuana industry. Those estimates were believed to be upwards of $1 billion in sales this coming fiscal year, but as of May, the industry has collected about 4.2 million in sales and excise taxes.
The drug was first legalized the year 2012 in Colorado after an overwhelming vote, but the revenue from sales unfortunately isn’t as much as local Colorado governments were hoping for. The lead economist at Denver-based Colorado Futures Center of Colorado State University spoke on the issue: “I don’t think it’s the savior for state budgets,†she began, “It brings in additional revenue, but it also brings in additional costs for administration of the system and regulation and monitoring. It’s not free money.â€
And so it’s becoming extremely evident that it really isn’t free money, and the industry should not be relied on to patch holes of a sinking ship. There are many reasons why the industry hasn’t come close to estimations. Below is a list of possible reasons:
- Slow licensing and approval
With new markets, at the beginning, licensing can often be slow. Still working out the kinks (similarly to what we are seeing in Illinois) can take time. It also doesn’t help that there is a:
- Shortage of product
Not being able to keep up with demands can hurt revenue immensely. This shortage caused early sales to fall short, and making up that for that revenue loss will be difficult.
- Medical Marijuana over Recreational sales
More cannabis users are going the medical marijuana route instead of buying recreationally. This is because the tax on medical marijuana is taxed at a lower rate than retail marijuana.
- Uncertainty
Because it’s a relevantly new market, it’s hard to know what is going to happen with the Marijuana industry. The Governor first requested $75 million, but scaled back his proposal by $21 million (down to a 54 million request). It’s believed that the market will most likely follow suit of other “sin levies†industries, such as cigarettes and alcohol, which represent a fraction of states general-fund budget.
In years to come, more Colorado cites are looking to expand their marijuana retail stores. As of now, the only businesses that are legally allowed to sell recreational marijuana are businesses that have already been approved to sell marijuana for medical purposes.
Steadman, the vice-chairmen of the Joint-Budget Committee stated, “We’re trying to maintain a strong nexus between the tax that’s collected on legal marijuana sales and the expenditures that are being made, in that they are all related to substance use, abuse, prevention and treatment and law enforcement.â€
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“The governor didn’t get everything he wanted,†said Steadman. While this may be true, the marijuana industry is still new. Once hurdles are overcome, the industry may see closer to the revenue state lawmakers desire.
Though positive changes the marijuana prohibition are being made in Colorado and Washington, recreational use in Illinois is still illegal. If you find yourself in a tough situation, and need legal advice, please contact The Office of J. Samuel Worley, LCC’s Chicago drug criminal defense lawyers for the support you need. We offer free, confidential to all those needing more information. Contact us today: 312-953-LAW1
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