Marijuana Tax Eyed by Some States to Solve Financial Woes

With Washington and Colorado both legalizing marijuana for recreational use, some state legislators are now calling to make pot legal at a federal level.  

Rep. Jared Polis (D-Colo.) is currently pushing for federal marijuana legalization in Congress in order capitalize on the potential tax revenue as a creative solution for aiding state budgets still reeling from the recession. 

"I've seen some estimates in the high tens of millions, as much as $100 million for [Colorado]," Polis told Politico.

Some market analysts have estimated that with pot now legal for recreational use in Colorado and Washington, taxing the drug could bring in as much as billions of dollars annually. 

If marijuana were legalized at a federal level, researchers estimate the market potential for pot could be worth anywhere between $10 billion and $120 billion a year, in addition to between $35 billion and $45 billion in taxes, according to statistics gathered by Bloomberg.

Dale Gieringer, the director of California National Organization for the Reform of Marijuana Laws, said legalizing recreational marijuana use in the state could possibly create a revenue of $1.2 billion, according to The Christian Post. Gieringer says he's experimented with a study that would use traditional sales tax and another $50 fee per ounce of marijuana. He argued that if legalized throughout the U.S., tax revenue from legal pot could light up infrastructure in struggling cities across the country, including a "substantial dent in needed school improvements, particularly in poorer districts."

Rosalie Liccardo Pacula, the co-director of the RAND Drug Policy Research Center, tempered Gieringer's claims by cautioning that more study was still needed before such a tax could be proved viable. "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," she said.

Polis agrees. He says law makers need to fully understand how to exact a fair tax on pot before federal legalization can take effect: "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."

According to marijuana non-profit advocacy group NORML, "Modern research suggests that cannabis is a valuable aid in the treatment of a wide range of clinical applications. These include pain relief, nausea, spasticity, glaucoma, and movement disorders. Marijuana is also a powerful appetite stimulant and emerging research suggests that marijuana's medicinal properties may protect the body against some types of malignant tumors, and are neuroprotective."

Based on the most recent Gallup poll, national support for the legalization of marijuana is at an all-time high. Adults under 30 back legalization 62 percent; 56 percent of adults between the ages of 30-49 are in favor of legal pot; and 49 percent of people between 50-64 support legalization.