Good news for E. Cannabis Unum supporters across the country: Texas, land of big businesses and economic prosperity, could stand to gain a ton of money from legalizing marijuana -- more than $166 million per year, by some estimates. That's a Texas Miracle if we've ever heard one.
Of course, it would also take a miracle.
A report out this week by financial analysts at NerdWallet points to the financial benefits of legalizing marijuana. "We put the study out there because with the upcoming election, citizens will cast ballots for recreational and medical marijuana," says Divya Raghavan, who authored the study. "People have to make this decision very quickly." Voters in Oregon, Alaska, Washington, D.C., Florida and California will consider various levels of marijuana decriminalization this November.
So where does that number come from? Because all marijuana sales in this state are under-the-table, it's difficult to get an exact number. But a solid estimate of Texas' marijuana market can be built based on the approximate population of pot smokers and the states' percentage of the U.S. marijuana market. From there, Texas' sales tax and an expected sin tax yield an annual estimated revenue of $166,303,963.
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Although we're not optimistic that pot will make it to the Texas ballot anytime soon, that would be a helluva boost for the state economy. "Everyone knows that it leads to increased revenue, but we wanted to put a number to that," Raghavan says. "And these are conservative numbers. They don't include reduced spending on law enforcement, which is around 7.7 billion nationwide. And we also didn't include potential market changes. It's possible, if it's legalized, use would increase."
And the revenue would likely go to a worthy cause. "States would have to decide how exactly would they want to spend this increased revenue," says Raghavan. "Washington, for example, intends to put that revenue toward education and drug rehabilitation programs." Can we just say right now how much we love the idea of a pot-funded Texas Education Agency?
Any predicted costs from legalizing marijuana would likely come from regulatory adjustments. "There would definitely be increased spending on regulating the marijuana legal market," Raghavan says. "There would be a lot of work that would have to go into this. Do they want to legalize edibles? What kind of FDA restrictions do they want to impose? Where will they put the revenue?"
Still, the financial benefits far outweigh any drawbacks. For some perspective, Raghavan points out, marijuana legalization would likely bring in more money than University of Texas football, the most valuable college team in the country. "Texas stands to gain a lot," she says. "There's the percentage of people in the state that smoke marijuana, and then there's the size of the state. For Texas, any major change like this would have a giant impact on the state's revenue."