Katelyn Baker
Well-Known Member
Voters in four states across the country approved ballot measures Nov. 8 to legalize the recreational use of marijuana: California, Maine, Nevada and Massachusetts. That brings the total number of states in the U.S. where recreational marijuana use is allowed to seven.
However, many of those who voted in favor of the proposals in their states are going to have a rude awakening once they come down off their celebratory highs.
Of the four, California and Nevada should have a reasonable tax flow to handle the increased administrative costs, law enforcement expenses, environmental disruptions, road fatalities and youth social difficulties that have been shown to accompany the use of recreational marijuana in a state. They might even have a tad left over for schools and other needed services.
But Maine and Massachusetts are not likely to generate enough funds to cover the administration in addition to the surveillance of the new industry - let alone pay for the crime and social ills that are sure to come.
California has the most experience with the use of cannabis, having established a medical program in 1996. From the start, medical cannabis had a state sales tax imposed on it as well as any local taxes that applied. This generated an income base to adequately monitor programs and provide any additional services that became necessary such as public health monitoring and law enforcement.
Lessons were learned, and these lessons were applied in developing the proposals for legalized marijuana.
The bill that California voters passed will have a 15 percent excise tax on all marijuana, including medicinal marijuana. For recreational users, there will be additional state taxes applied at the rate of between 7.5 percent to 9.5 percent. On top of that, local municipalities may have taxes of their own or have taxes on consumable/edibles sold to the public.
That is not all. Before the marijuana even reaches a dispensary, growers have to pay taxes. The growers have a cultivation fee of $9.25 for each ounce of buds produced and $2.75 for an ounce of leaves.
On the opposite coast, Massachusetts is going to have a harsh lesson in reality when it comes to recreational marijuana. The state will probably need to pull funds from other sources to even administer a recreational marijuana program.
Massachusetts chose not to tax medicinal marijuana when it was legalized in 2012. None of the surrounding states had exempted medical marijuana from taxation, but Massachusetts did.
So from the start there were no funds to direct toward groups requiring resources to handle the concerns with marijuana. And immediately one such concern arose: driving under the influence of marijuana.
A state trooper, Thomas Clardy, was allegedly killed by a motorist who was known to have just purchased three marijuana cigarettes from a newly opened medical marijuana dispensary. The resources to analyze the blood levels that documented marijuana in the driver's system came from existing funds.
Now, recreational marijuana in Massachusetts will be subject to a sales tax at the state's rate of 6.25 percent, but the excise tax will be only 3.75 percent. Local municipalities will only be able to add in a maximum of 2 percent to cover the costs of increased law enforcement and public health management or any other unforeseen problems that arise with recreational shops in their communities.
This totals a 12 percent tax on recreational marijuana. However, many consumers will actively seek medical marijuana certificates and will not be taxed at all. Compare this revenue to California's, which totals at the very least 15 percent for medical consumers and 22.5 percent for recreational consumers. The amount of revenue is even greater when considering the taxes on the growers.
The existing recreational states had already understood the need for revenue, and Oregon even considered increasing the existing rate of 25 percent to make up for shortcomings as the state does not have a sales tax. Washington has an excise tax of 37 percent on recreational marijuana, which had been a change from an earlier system with 25 percent tax on the producer, 25 percent on the processor and 25 percent for the retail seller.
Colorado also taxes recreational marijuana at a rate that is expected to cover the expenses related to the selling and consumption of the product and with hopes of revenue to support other state activities. The rate in Colorado is a 15 percent excise tax, a 10 percent recreational marijuana sales tax and a general state sales tax of 2.9 percent. There may also be local state taxes.
One of the new recreational states fell in between the California high and Massachusetts low - with neither state having an aggressive plan to generate income from the sale of recreational marijuana. Nevada will be imposing a 15 percent excise tax in addition to the sales tax of 4.6 percent and local taxes as high as 3.55 percent.
Maine will generate the least amount of revenue from recreational marijuana sales, having taxed the recreational marijuana at only 10 percent. Massachusetts did not do much better with a total rate of 10 percent and some cities at 12 percent. This compares poorly to all the other states having recreational marijuana.
Nevada has the next lowest rate, totaling 19.6 percent with a potential to be up to 23.15 percent. California compares well to the other more experienced states with a total of 22.5 to 24.5 percent and the additional cultivation fees. This compares to Washington at 37 percent, Oregon at 25 percent and Colorado at 27.9 percent.
The opportunity to get high will come with the added benefit of not having to pay for the consequences in the states of Massachusetts and Maine.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Money Matters In Marijuana Measures
Author: Denise A. Valenti
Contact: 972.402.7070
Photo Credit: Getty Images
Website: MultiBriefs
However, many of those who voted in favor of the proposals in their states are going to have a rude awakening once they come down off their celebratory highs.
Of the four, California and Nevada should have a reasonable tax flow to handle the increased administrative costs, law enforcement expenses, environmental disruptions, road fatalities and youth social difficulties that have been shown to accompany the use of recreational marijuana in a state. They might even have a tad left over for schools and other needed services.
But Maine and Massachusetts are not likely to generate enough funds to cover the administration in addition to the surveillance of the new industry - let alone pay for the crime and social ills that are sure to come.
California has the most experience with the use of cannabis, having established a medical program in 1996. From the start, medical cannabis had a state sales tax imposed on it as well as any local taxes that applied. This generated an income base to adequately monitor programs and provide any additional services that became necessary such as public health monitoring and law enforcement.
Lessons were learned, and these lessons were applied in developing the proposals for legalized marijuana.
The bill that California voters passed will have a 15 percent excise tax on all marijuana, including medicinal marijuana. For recreational users, there will be additional state taxes applied at the rate of between 7.5 percent to 9.5 percent. On top of that, local municipalities may have taxes of their own or have taxes on consumable/edibles sold to the public.
That is not all. Before the marijuana even reaches a dispensary, growers have to pay taxes. The growers have a cultivation fee of $9.25 for each ounce of buds produced and $2.75 for an ounce of leaves.
On the opposite coast, Massachusetts is going to have a harsh lesson in reality when it comes to recreational marijuana. The state will probably need to pull funds from other sources to even administer a recreational marijuana program.
Massachusetts chose not to tax medicinal marijuana when it was legalized in 2012. None of the surrounding states had exempted medical marijuana from taxation, but Massachusetts did.
So from the start there were no funds to direct toward groups requiring resources to handle the concerns with marijuana. And immediately one such concern arose: driving under the influence of marijuana.
A state trooper, Thomas Clardy, was allegedly killed by a motorist who was known to have just purchased three marijuana cigarettes from a newly opened medical marijuana dispensary. The resources to analyze the blood levels that documented marijuana in the driver's system came from existing funds.
Now, recreational marijuana in Massachusetts will be subject to a sales tax at the state's rate of 6.25 percent, but the excise tax will be only 3.75 percent. Local municipalities will only be able to add in a maximum of 2 percent to cover the costs of increased law enforcement and public health management or any other unforeseen problems that arise with recreational shops in their communities.
This totals a 12 percent tax on recreational marijuana. However, many consumers will actively seek medical marijuana certificates and will not be taxed at all. Compare this revenue to California's, which totals at the very least 15 percent for medical consumers and 22.5 percent for recreational consumers. The amount of revenue is even greater when considering the taxes on the growers.
The existing recreational states had already understood the need for revenue, and Oregon even considered increasing the existing rate of 25 percent to make up for shortcomings as the state does not have a sales tax. Washington has an excise tax of 37 percent on recreational marijuana, which had been a change from an earlier system with 25 percent tax on the producer, 25 percent on the processor and 25 percent for the retail seller.
Colorado also taxes recreational marijuana at a rate that is expected to cover the expenses related to the selling and consumption of the product and with hopes of revenue to support other state activities. The rate in Colorado is a 15 percent excise tax, a 10 percent recreational marijuana sales tax and a general state sales tax of 2.9 percent. There may also be local state taxes.
One of the new recreational states fell in between the California high and Massachusetts low - with neither state having an aggressive plan to generate income from the sale of recreational marijuana. Nevada will be imposing a 15 percent excise tax in addition to the sales tax of 4.6 percent and local taxes as high as 3.55 percent.
Maine will generate the least amount of revenue from recreational marijuana sales, having taxed the recreational marijuana at only 10 percent. Massachusetts did not do much better with a total rate of 10 percent and some cities at 12 percent. This compares poorly to all the other states having recreational marijuana.
Nevada has the next lowest rate, totaling 19.6 percent with a potential to be up to 23.15 percent. California compares well to the other more experienced states with a total of 22.5 to 24.5 percent and the additional cultivation fees. This compares to Washington at 37 percent, Oregon at 25 percent and Colorado at 27.9 percent.
The opportunity to get high will come with the added benefit of not having to pay for the consequences in the states of Massachusetts and Maine.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Money Matters In Marijuana Measures
Author: Denise A. Valenti
Contact: 972.402.7070
Photo Credit: Getty Images
Website: MultiBriefs
