As an increasing number of jurisdictions continue to embrace cannabis legalisation, there has been growing evidence to suggest the benefits that these reforms can hold for economies around the world.
A new report, published by the Marijuana Policy Project (MPP), has gathered data from US states that have so far introduced cannabis legalisation revealing that a combined $7.9 billion has been raised in tax revenue from legal, adult-use cannabis sales as of May 2021.
So far, 18 states have legalised the adult use of recreational cannabis, allowing for regulated cannabis products to be sold to adults over the age of 21. However, seven of these states are yet to begin licensing cannabis and collecting tax from sales, illustrating the potential for revenue growth in the future.
MPP’s report set out to review “each state’s adult-use cannabis tax structure, population, and revenue from legalization.” The figures do not include tax revenue from medical cannabis products, application and licensing feed, or additional income tax generated by the new industries.
What is this revenue being spent on?
In many of these states, a significant percentage of this revenue has been dedicated to the development of social equity and educational programmes.
In Colorado, which became the first state to legalise recreational cannabis in the US, $404.5 million of cannabis tax revenue has so far been dedicated to improving the state’s public school system.
In other parts of the country, such as Washington D.C., nearly $600 million from every $1 billion is directed to public health initiatives, including providing health insurance to low-income families.
As the USA, along with most other countries around the world, has experienced significant disruption over the last 14 months, there are many who claim this revenue could also be used to help re-develop an economy that has been ravaged by the ongoing coronavirus pandemic.
A growing number of advocates and campaigners as well as government commissions are now calling for the UK to take advantage of the revenue that could be earned through a reformed cannabis sector.
A recent report, written by industry experts, claimed that the UK is currently missing out on a multi-billion-pound industry due to the current restrictions on the sector. Furthermore, a senior government taskforce, led by former Conservative leader Sir Iain Duncan-Smith, laid out to the prime minister how reforms to the UK’s cannabis and hemp sector could significantly benefit the UK’s economy.
As this year we play witness to fifty years of the failed Misuse of Drugs Act (1971), calls for reforms in this area are only growing. It seems that it is more a matter of if, rather than when, the UK government will be forced into a situation where cannabis reform is the only acceptable option.