The first two states to legalize recreational marijuana have collectively raked in at least $200 million in marijuana tax revenue, according to the latest tax data -- and they're putting those dollars to good use.
How long does it take a state to collect more than $117 million in tax revenue from a single industry? About a year and a half.
The Huffington Post reports that Colorado currently has collected that much from the recreational and medical marijuana markets.
Trailing close behind is the State of Washington. Washington has been selling recreational marijuana for a year now and is seeing $83 million in excise taxes.
"Our philosophy has been that marijuana pays its own way," J. Skyler McKinley, deputy director of Colorado Gov. John Hickenlooper's (D) Office of Marijuana Coordination, told the Huffington Post.
He explained that Colorado officials look at marijuana the same way they look at any other commodity market in Colorado -- just another place where the state gets some revenue, but doesn't stake its whole budget on it.
"The big lesson we tell other states is you probably shouldn't legalize marijuana if you want to make money -- that's not why you do it," McKinley said. "You do it because you think that a regulated marketplace might be safer than an unregulated marketplace or you believe that the war on drugs didn't work."
Jaime Smith, deputy communications director for Washington Gov. Jay Inslee (D), agreed.
"The legalization initiative was not driven by a desire for a revenue, but it has provided a small assist for our state budget," Smith told the Huffington Post. "When you’re looking for billions of dollars, tens of millions doesn’t solve the problem but it certainly doesn’t hurt."
In this video, Dan Skye, the Editor-in-Chief of High Times Magazine, explains how the marijuana taxation structure works, and how America is missing out on one major marijuana market: hemp
So what are Colorado and Washington spending money on? Education, mainly.
The Huffington Post breaks the funding down:
- In Colorado, a significant portion of marijuana tax revenue is designated for public schools in the state.
- For the 2014-2015 fiscal year, $23.9 million has been generated for the Building Excellent Schools Today (BEST) grant program
- In addition to marijuana excise taxes, additional funding for BEST is provided from state lottery spillover proceeds and interest, as well as the state land trust -- all of which is put into a single fund and dispersed via grants to needy districts and schools.
- This year was the first time the state utilized the marijuana tax revenue as part of the total grants, which were awarded starting in May.
- Colorado also funded about $8 million in marijuana research using revenue generated from various marijuana fees, putting it towards eight different studies investigating the medical promise of cannabis.
- In Washington, a portion of the state's collected marijuana taxes and fees also goes to schools, via the state's general fund
- Some of the most novel allocation of those dollars is toward research into the short- and long-term effects of the state's reformed marijuana policy, with multiple state agencies participating in that research.
- One of the most ambitious research projects is from the state's own public policy research arm -- the Washington State Institute for Public Policy (WSIPP) -- which is conducting a broad cost-benefit analysis of the legalization of recreational marijuana.
- The full scope of the project is exceedingly comprehensive. Reports are due Sept. 1 in 2017, 2022 and 2032, examining the effects of legalization on public health, safety, youth use, criminal justice, jobs creation, revenue and much more.
- It's a research goal so impressively lengthy and broad that the Brookings Institute called it "nearly unprecedented."
Aside from bringing in a new source of tax revenue, one important fact of the growing marijuana industry is that it creates more American jobs.
Here are 16 jobs that didn’t exist prior to marijuana legalization.
Those jobs are also paying higher than minimum wage.
“At Denver’s first ever marijuana job fair earlier this year, some bud trimmers were being offered $15 per hour,” High Times reports.
What’s exciting is that these jobs are also secure. As it stands, retail weed sales are generating nearly $19 million a month, which is an increase from the already impressive $14 million per month during the first three months of legal sales.
That just means more workers will be needed.
Although the marijuana industry alone won’t be solving our national unemployment rate, it can very well put a dent in it, as it does to Colorado and Washington’s state budget.
The views and opinions expressed herein are those of the authors alone and do not necessarily reflect the views of Ora Media, LLC its affiliates, or its employees.
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