Marijuana Tax? Legislators Discuss Pot Tax to Help Balance Budgets (VIDEO)

Expand | Collapse
REUTERS/Enrique MarcarianA cannabis sativa plant is seen in this file photo.

A marijuana tax is being touted by some legislators, who are seeing the potential money-making power of cashing in on states that recently legalized recreational marijuana use.

With budgets still at a pinch from the recession, legislators are eyeing any reasonable means to finding the millions needed to fill budget holes.

Some analysts have predicted now that Colorado and Washington have legalized recreational marijuana use, a tax could potentially earn hundreds of millions or even billions of dollars for budgets.

Rep. Jared Polis (D-Colo.) is currently pushing a federal legalization in Congress, and he has said, "I've seen some estimates in the high tens of millions, as much as $100 million for [Colorado]," according to Politico.

He is promoting that this extra cash could make a "substantial dent in needed school improvements, particularly in poorer districts."

The director of California National Organization for the Reform of Marijuana Laws, Dale Gieringer, has argued that legalizing marijuana in the state could bring in about $1.2 billion for California alone. He has conducted a study that proposes a traditional sales tax plus an additional $50 levy per ounce of marijuana.

Rosalie Liccardo Pacula, the co-director of the RAND Drug Policy Research Center, has urged caution though. She has said, "You have to know more about the structure of the demand curve, which we don't have any data on because this is black-market; it's all conjecture."

Polis has taken a similar line, insisting that taxing marijuana should not be rushed into, otherwise it could push users back to the unregulated black market for cheaper drugs: "You want to make sure the black market doesn't have an advantage over the regulated market because if it does, then the whole concept fails and people will continue to buy marijuana illegally — so there has to be a price advance for the legal market," Polis said.

Here is a video discussing proposals for a marijuana tax: