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We’re missing out on lots of revenue by not legalizing pot

Thursday, Oct 12, 2017

* The Cannabist

In 2017, Colorado eclipsed $1 billion in marijuana sales in eight months; in 2016, it took 10 months.

Colorado’s marijuana retailers logged upward of $1.02 billion in collective medical and recreational sales through August, according to The Cannabist’s extrapolations of state tax data released Wednesday. Year-to-date sales are up 21 percent from the first eight months of 2016, when recreational and medical marijuana sales totaled $846.5 million.

This year’s cumulative sales equate to more than $162 million in taxes and fees taxes and fees for Colorado coffers. […]

The special sales tax rate for recreational marijuana increased to 15 percent from 10 percent in July, as the result of a new law that also exempted recreational marijuana products from the 2.9 percent standard state sales tax. Medical marijuana and accessories are still subject to that 2.9 percent sales tax rate. […]

Here’s a look at Colorado’s previous cumulative yearly sales totals:

    2014: $699,198,805
    2015: $996,184,788
    2016: $1,313,156,545

Illinois has more than twice Colorado’s population.

Right now, Illinois has decriminalization. But that means it’s not taxed and the production and distribution networks are controlled by criminals - and some of those criminals are violent people.

- Posted by Rich Miller        

  1. - Curl of the Burl - Thursday, Oct 12, 17 @ 10:11 am:

    I firmly believe that if Rauner is not reelected he would be willing to sign a full-blown legalization bill during the 2018 veto session or, more likely, the 2019 lame duck session. Why not? What are people going to do? Vote against him? He would have NOTHING to lose and could impact/affect REAL change on the revenue and criminal justice reform fronts.

  2. - Grand Avenue - Thursday, Oct 12, 17 @ 10:12 am:

    Cook County & Colorado have approximately the same population (b/w 5 & 6 Million)

    That $162 Million would basically make up for the lost pop tax revenue.

  3. - DuPage Moderate - Thursday, Oct 12, 17 @ 10:15 am:

    Legalization makes too much sense - which means it won’t happen.

  4. - We'll See - Thursday, Oct 12, 17 @ 10:16 am:

    At a holiday party with the in-laws this topic came up and a couple of the in-laws ridiculed me for suggesting open access to pot. I laughed and said “there’s not a person in this room who doesn’t know where they could buy some today — with that, their daughter said “that’s true, I know who is selling at the junior high.”

    Yet another priceless family moment.

  5. - Grand Avenue - Thursday, Oct 12, 17 @ 10:20 am:

    Plus, to me it’s fundamentally immoral to make a naturally growing plant illegal. It’s the moral equivalent of calling for Tigers to go extinct.

  6. - In 630 - Thursday, Oct 12, 17 @ 10:25 am:

    This is one of those things that people are more open to and ready for than is understood by people in high levels of government and politics.

  7. - Joe M - Thursday, Oct 12, 17 @ 10:26 am:

    But isn’t the U.S. Attorney General, Sessions, pointing out that pot still violates federal law - and he even makes rumblings about shutting down states that have medicinal pot, yet alone states that legalized it completely. Has Sessions changed his stance?

  8. - Last Bull Moose - Thursday, Oct 12, 17 @ 10:30 am:

    To me breaking the criminal distribution network is much more important than the additional tax revenue. My problem with legalizing pot like cigarettes or alcohol is that I do not want a profit incentive to create more users. We have seen with the opioid addictions the problems when drugs are marketed. I distinguish between drugs being sold and being marketed.

    There is also a problem with federal law and officials. I don’t think the feds can stop a state from distributing marijuana. It took a constitutional amendment to ban alcohol and states have powers that individuals don/t.

    So I propose we have state controlled distribution of marijuana through state stores where it is sold but not marketed. The state can limit who can buy and control quality.

    Over time this can be expanded to heroin and some other drugs.

    Since we cannot get rid of the drugs, this is a least bad option. It breaks the criminal distribution networks, protects against federal intervention, and sells but does’t market the drugs.

  9. - JJJJJJJJJJ - Thursday, Oct 12, 17 @ 10:31 am:

    People scoffed yesterday when the Mom+Babies founder called pot legalization a core democratic principle. Granted, that might be a bit of an exaggeration. But, it should be a serious part of more candidates’ platforms and I have a feeling Kennedy laughed off the idea.

  10. - Rich Miller - Thursday, Oct 12, 17 @ 10:37 am:

    ===pot still violates federal law===

    It does. But states can have different laws. Point to me in the Constitution where it says all state criminal laws have to reflect federal laws? It’s a different matter entirely if a state law violates the Constitution.

  11. - Freezeup - Thursday, Oct 12, 17 @ 10:46 am:

    Well written article about how legalization didn’t simply end the black market cannabis trade in Washington. State still struggles with some of the same old problems.

    As unpopular as this opinion is, there are hurdles that won’t be solved by legalization alone.

  12. - Anon - Thursday, Oct 12, 17 @ 10:46 am:

    Article VI, clause 2.

  13. - Ed Higher - Thursday, Oct 12, 17 @ 10:52 am:

    Though pot taxes wouldn’t fix Illinois’ budget in one go, it’s still ridiculous not to legalize.

  14. - Joe M - Thursday, Oct 12, 17 @ 10:57 am:

    ===pot still violates federal law===

    I only know what I read in the papers. Two of those articles below were words from the mouth of Sean Spicer though. The first one actually discusses possible Trump administration approaches, as unrealistic as they might be.

  15. - Last Bull Moose - Thursday, Oct 12, 17 @ 11:03 am:

    Anon. I think you misread. The drubbing laws are not treaties. They rely on Federal control of interstate commerce.

  16. - Last Bull Moose - Thursday, Oct 12, 17 @ 11:04 am:

    Drug laws. Not drubbing

  17. - Grandson of Man - Thursday, Oct 12, 17 @ 11:05 am:

    Colorado is set to exceed last year’s sales revenue in the fledgling recreational marijuana industry, when combined with MMJ.

    The prospects for Illinois is bright, for tax revenue and sales revenue, because of our population size. The voters appear to be ahead of the politicians on this issue. I think it’s important and at this point will not vote for Kennedy in the Primary, because of his negative statements.

  18. - Grandpa Lou - Thursday, Oct 12, 17 @ 11:25 am:

    Legalize it before we are the last state to do so. Illinois desperately needs the revenue, and this is one use tax people won’t mind paying.

    Then legalize a downtown casino.

  19. - VanillaMan - Thursday, Oct 12, 17 @ 11:27 am:

    I really want to believe Cannabist, but you know, they’re about as unbiased a news source on this as a wino recommending a bottle of gutter wine.

  20. - Ghost - Thursday, Oct 12, 17 @ 11:35 am:

    Co makes 500 million from pot sales. If Il legalized it and had a higher tax rate then 2.9 we could make 1 to 1.5 billion. That would pay down pension liability.

  21. - Rich Miller - Thursday, Oct 12, 17 @ 11:47 am:

    ===Co makes 500 million from pot sales.===

    No. That’s wrong. That’s the total since legalization in 2014.

  22. - Ghost - Thursday, Oct 12, 17 @ 11:49 am:

    Ok 200k a year then…. so we could make 400-500 mil with a slightly higher rate. Still a nice chunk of change and a nice or soon payment

  23. - Anon. - Thursday, Oct 12, 17 @ 11:49 am:

    Article VI, cl. 2 applies to all federal laws enacted under the US constitution (like the Commerce Clause), not just treaties.

  24. - Payback - Thursday, Oct 12, 17 @ 12:11 pm:

    The reason that marijuana is not legalized in Illinois is because of the good old boy Reps. in the legislature. The small town people they represent don’t want to let go of the 1960s. Keeping pot illegal gives them an excuse for their local cops to stop the cars of “hippies” and “undesirables” and “run them out of town”, plus impound their cars and fine them in court. It makes them feel like they are still in control of their decaying little towns which have no industry after the deindustrialization of NAFTA and GATT, even when they aren’t able to control the ravages of meth and alcohol.

    Pot is horrible, but booze is okay because that’s what the rednecks see on beer commercials during football games. For an example of this hypocritical attitude, stop in any gas station in Whiteside county, and you will see thirty(!) packs of Busch Lite being cleaned out every day. I asked the cashier why Busch Lite is so popular, and he said, “it’s the cheapest beer we have.” Drive around the countryside and view the massive amount of beer cans thrown all over the road, plus the bullet holes in the signs. The Whiteside Sheriff isn’t doing a thing about the bullet holes and drunk drivers, that’s just good old boys having fun. But pot is an evil gateway drug. The waxworks on the county boards in smalltownsville are stuck at least fifty years in the past, and this attitude filters up to their local good old boy state Reps. like Mike Smiddy.

    Legalization will have to be forced down from the top. Within two years, all the local politicians will see is the money coming in, and wonder why they didn’t do it sooner. The federal government is not going to raid Illinois marijuana shops if it is legalized, they cannot even control the borders of this country.

  25. - @MisterJayEm - Thursday, Oct 12, 17 @ 12:21 pm:

    “it’s fundamentally immoral to make a naturally growing plant illegal. It’s the moral equivalent of calling for Tigers to go extinct.”

    Oh no — the Illinois Noxious Weed Law is gonna break your heart, dude…

    – MrJM

  26. - Flip357 - Thursday, Oct 12, 17 @ 12:38 pm:

    The first state in a particular region to legalize recreational marijuana will reap the the benefits. A portion of Washington and Colorado’s windfalls come from cannabis tourism; out-of-state visitors who purchase in those states. They have the regional monopoly on recreational marijuana, that will dry up once a neighboring state legalizes. If Wisconsin (in all probability) legalizes marijuana before Illinois, they will reap the big windfall. Regardless, the revenues will decline as more states legalize recreational marijuana and people do not have to visit out-of-state to purchase.

    Now, if Illinois legalizes, do not be surprised if dispensaries open at the first exit of the interstates coming into the state.

  27. - Last Bull Moose - Thursday, Oct 12, 17 @ 12:47 pm:

    Anon . You are right, subject to the Federal law being based on the Constitution. That is where the Commerce Clause comes into play. Even though it has an expanded scope, I do not think it can be used to control State action. It would be an interesting case.

  28. - Anonymous - Thursday, Oct 12, 17 @ 12:56 pm:

    Illinois is in a far more populous region than either Washington or Colorado. The tax revenue would be enormous compared to those tow states.

  29. - Babygirl1 - Thursday, Oct 12, 17 @ 1:01 pm:

    Here is the thing if they legalize marijuana, we get the taxes from the dispensary at multi levels, apply sales tax to the individual, the dispensary level as a company in replacement tax & income tax. so it will generate the revenue from their as well as the tax to the growers who sell to the dispensary. it is a win-win situation.

  30. - Thomas Paine - Thursday, Oct 12, 17 @ 1:01 pm:

    Rich -

    You are only capturing a fraction of the economic growth.

    Every gas station in Colorado is selling paraphernalia and trinkets.

    Denver is the fastest growing city for Millennials in the country.

    The jobs will go where the highly-skilled work force is, and the work force wants the choice to get high every once in awhile.

    Legalization would definitely give Illinois a leg up in the competition for Amazon.

  31. - Last Bull Moose - Thursday, Oct 12, 17 @ 1:24 pm:

    I would rather have pot than free range tigers.

  32. - wordslinger - Thursday, Oct 12, 17 @ 1:26 pm:

    Tenessee takes great pride in its whiskey; Kentucky in its bourbon.

    Both states set strict requirements on what it takes to distill and carry their state names on their brands, highly valued and renowned around the world.

    Those guys, in the heart of the Bible Belt, have no problem making, regulating, selling and profiting from dangerous old skull popper; you can buy enough of that to kill you at Walgreens right now. And on Sundays, too.

    But Illinois can’t get it together to give entrepreneurs a chance on weed, which never killed anyone.

    We let the gangsters make the money.

    And create “task forces” on the opioid epidemic, which has been killing people across all demographics for years now.

  33. - 33rd ward - Thursday, Oct 12, 17 @ 1:33 pm:

    Remember folks, nobody has ever died from cannabis.

    In the land of the free and the home of the brave, personal choices shouldn’t be forbidden by government. Unless they can kill.

    We even allow assault rifles because of our commitment to freedom.

    How does cannabis fail this simple test?

  34. - BuckinIrish - Thursday, Oct 12, 17 @ 1:43 pm:

    Unfortunately, a federal law will always preempt (or trump) a state law. In other words, even if marijuana use, cultivation, or distribution is legal in your state, you can still face serious federal charges. However, federal authorities typically focus on high profile and high-volume distributors and growers.

    It is unclear how the current administration will approach marijuana policy. Attorney General Jeff Sessions has historically favored strict enforcement of the federal laws. However, other administration members have hinted that marijuana enforcement is not a top priority at this time.

  35. - CCP Hostage - Thursday, Oct 12, 17 @ 2:26 pm:

    Payback, I’m not sure you’ve been south of I80 lately, but your type of rhetoric fuels the divide in the state. Just stop it.

  36. - blue dog dem - Thursday, Oct 12, 17 @ 2:41 pm:

    I am going contrarian here. We won’t sell half the pot in Illinois as Colorado. Why? Self-cultivation. Mix it in a row of corn. let the farmers nitrogen kick in. Bingo-Bango-’Bong’o.

  37. - Downstate43 - Thursday, Oct 12, 17 @ 3:11 pm:

    The issue of preemption was settled in 1824 (see Gibbons v. Ogden) and has only been reinforced since. With regards to preemption of federal marijuana law specifically, see Gonzales v. Raich (2005). It’s not a matter of whether a state law is constitutional or not, in this case.

    The debate of permissive state marijuana laws is now political, not legal. It would take some tortuous logic with far broader consequences for SCOTUS to nullify classification of marijuana as something other than Schedule 1, absent Congressional action. I just don’t see it being an issue the Court takes up. Again, it will have to be solved politically - there’s no point in arguing the legality.

  38. - Aha - Thursday, Oct 12, 17 @ 3:38 pm:

    ========== Rich Miller: “Point to me in the Constitution where it says all state criminal laws have to reflect federal laws? It’s a different matter entirely if a state law violates the Constitution.”==========

    They say Rich is a liberal, but he is actually a constitutional federalist!

  39. - NotMe - Thursday, Oct 12, 17 @ 4:15 pm:

    Payback: Smiddy is gone. He voted for the medical cannabis program and probably would’ve voted for the legalization bill. Don’t know about his replacement yet - time will tell.

  40. - You could say that, I couldn't - Thursday, Oct 12, 17 @ 4:28 pm:

    Let’s not get carried away and think legalized weed solves our fiscal problems. It’s some new revenue, but not nearly enough to solve our deficit.

    For example, Grand Avenue above suggests that legalized weed could replace the revenue from the sweetened beverage tax in Cook County. That’s true only if all the revenue from Cook County marijuana sales went to the county — zero to the state or to the city.

    Ghost suggests a tax rate higher than 2.9%, enough to raise $1.5 billion. But if total Colorado sales are $1.3 bln with half our population, we would be looking at a tax rate of 50% to raise that much. At a 50% tax rate, the already-well established black market for weed would thrive and people will continue to buy weed from their dealer.

    I am strongly in favor of legalizing marijuana for recreational use. It makes sense because the war on drugs harms us more than it helps. However, let’s be realistic about the revenue. We’ll be lucky to get twice what Colorado collects, and that would amount to about $350 million. Nothing to sneeze at, but not the cure-all to our fiscal problems.

  41. - You could say that, I couldn't - Thursday, Oct 12, 17 @ 4:29 pm:

    Correction to above: not Colorado’s 2.9% tax (which is for accessories), but the 15% tax on cannabis.

  42. - Blue dog dem - Thursday, Oct 12, 17 @ 4:57 pm:

    Seriously folks. Do you think illinois politicians are going to use new revenue sources to pay down debt? Thats not how it works and we all know it. We should
    Legalize it. All grow our own. And not pay any taxes.

  43. - wordslinger - Thursday, Oct 12, 17 @ 5:01 pm:

    –Seriously folks. Do you think illinois politicians are going to use new revenue sources to pay down debt?–

    Quinn did. Cut the backlog from about $10B to $4.5B. Cut spending, including 900M from K-12. Made full pension contributions.

    That’s why you were an enthusiastic supporter, remember?

  44. - Freezeup - Thursday, Oct 12, 17 @ 5:06 pm:

    You have to be extremely careful with the tax. If you are not careful with it you feed the same criminals. You benefit the same criminal organizations.

    The negative side of what has happened in Colorado has gone completely unnoticed here. There absolutely, 100% are negatives. Numerous criminal organizations moved to Colorado and set up shop, building large illegal commercial grows. There are also problems with street crime in the area of the state Capitol/art museum/library in downtown Denver. I saw this first hand in the middle of the day and it was stunning. I can’t imagine what it must be like down there at night. When we finally do this thing, let’s do it right. Let’s try to keep the negatives to a minimum. Let’s look at Colorado’s experience, at Washington’s experience and figure out how we can do this better. This is not as simple as “make it legal and reap the rewards.”

  45. - @MisterJayEm - Thursday, Oct 12, 17 @ 5:11 pm:

    “I would rather have pot than free range tigers.”

    We don’t have to choose, man…

    – MrJM

  46. - Rich Miller - Thursday, Oct 12, 17 @ 5:11 pm:

    ===I can’t imagine what it must be like down there at night===

    I was there. At night. Buncha hippie stoners hanging around. That’s easily dealt with.

  47. - Ron - Thursday, Oct 12, 17 @ 11:36 pm:

    Denver is dangerous? Now I’ve heard everything.

  48. - Downstate43 - Friday, Oct 13, 17 @ 8:14 am:

    == I was there. At night. Buncha hippie stoners hanging around. That’s easily dealt with. ==

    There have to be a few of the CPD fellas left from ‘68 to show the younger guys.

    Parts of Denver aren’t what I’d call “dangerous” like Garfield Park, but they are very seedy.

  49. - words - Friday, Oct 13, 17 @ 8:28 am:

    I get the impression that many who think marijuana smokers are “dangerous” also believe that it’s natural law or something that anyone should be able to walk the streets armed with as much load as they can carry. For safety.

  50. - Ron - Friday, Oct 13, 17 @ 8:41 am:

    What US city doesn’t have a seedy part?

  51. - Ron - Friday, Oct 13, 17 @ 8:42 am:

    Some of the posts on this story explain why Illinois is doomed. Literally the state could be collecting $400,000,000.00 a year right now to pay for the outrageous pensions of state employees, from a tax that would hurt no one, but people are against it.

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