Vermont’s legislature was first in the nation to approve a bill legalizing the recreational use of marijuana. But what does that mean for Vermont’s economy?
By popular ballot, voters have approved recreational use in California, Massachusetts, Maine, Nevada, Colorado, Washington, Oregon, Alaska and the District of Columbia.
Colorado, Washington, Oregon, and Alaska are the first states to collect taxes from retail sales of marijuana. Other states including California, Maine, and Massachusetts are expected to permit and tax retail marijuana sales starting in 2018. Rhode Island and New Hampshire are also considering such initiatives.
Legal marijuana is forecast to pump from $24 billion to $44 billion annually into the country’s economy by 2020.
- In Colorado, where there are more marijuana dispensaries than Starbucks and McDonalds locations combined, the state collected more than $135 million in taxes and fees on medical and recreational marijuana in 2015.
- In Washington, dispensaries have brought in over $1 billion in non-medical marijuana sales since the drug was legalized for recreational use back in 2012.
- In Oregon, dispensaries generated $15 million in tax revenue between July 2015 and June 2016.
- Here in Vermont, a former bill that created a regulated commercial market for marijuana was forecast to generate up to $75 million in tax revenue.
A 2015 RAND Corporation study commissioned by the Shumlin administration found that “between $25 and $75 million dollars annually, could come from neighboring states, as 40 times more marijuana users live within 200 miles of Vermont’s border than live within the state itself. This could provide between 1.4 to 5.2 percent of the state’s budget.”
However, common sense says “marijuana tourism” will likely be muted as neighboring states legalize.
And there are costs and unknowns that go along with retail marijuana sales and taxation. RAND researchers estimate state and local governments in Vermont spend less than $1 million each year enforcing current marijuana laws, but regulatory costs associated with legalizing production and retail sales of marijuana would likely exceed that level.
It’s also unclear what impact will legalization might have on other Vermont business sectors, including our nearly $300 million craft beer industry.
Still, it seems an eventual marijuana retail market will contribute to Vermont’s economy.
A statewide survey by Public Policy Polling found that of registered voters in Vermont:
– 39 percent were opposed to allowing adults 21 and older to possess and grow limited amounts of marijuana
– 57 percent support allowing adults 21 and older to possess and grow limited amounts of marijuana
And the RAND report estimated that during 2014, Vermont residents consumed between 15 metric tons and 25 metric tons of marijuana, and spent between $125 million and $225 million on marijuana.
Get ready for the “Green Mountain” brand to be extended in unexpected new ways.