The revenue projections were released in a new report from the New York City Comptroller’s office.
New York State could create a new $3.1 billion market if it were to legalize recreational marijuana, according to New York City Comptroller Scott Stringer. A market of that size would generate an estimated $435.7 million annually in tax revenue for the state.
“This is a new revenue stream,” Stringer told CNBC. “This is going to impact the kinds of resources we’ll have to invest in education, to invest in health care.”
A study released this month by Stringer’s office broke down the projected marijuana revenue calculations.
The projections are based on an estimate of 1.5 million current marijuana users throughout the state, which is between 8 and 10 percent of the 15.1 million adults living in New York State. The report estimates that each marijuana consumer would spend about $2,080 every year on cannabis products, which the report claims would be revenue filtered back into the economy.
The revenue estimates do not account for potential sales from workers who commute from outside New York each day, as well as the 239 million tourists who the state each year.
Talk of Legalization
As of recently, marijuana legalization has been at the forefront of conversations among politicians in New York State.
While not yet fully behind legalization, Gov. Andrew Cuomo recently proposed decriminalization last year and has requested a state-agency led study on the health and economic impacts of legalization.
Major candidates challenging Cuomo for governor in November – Democrat Cynthia Nixon and Republican Joel Giambra running as an independent – have each said they would support marijuana legalization if elected.
Nixon has argued that legalization would not only bring in tax revenue, but also help address what she calls the mass incarceration of minorities.
New York is one of 29 U.S. states to have legalized medical marijuana. If New York were to legalize recreational marijuana, it would join nine other U.S. states that have ended prohibition and permitted the possession and use of marijuana by adults aged 21 and older.
Legalizing and regulating marijuana in New York, Stringer claimed, would shift the already-existent illegal marijuana market to a legal one that contributes to public expenditures.
“Let’s not be naïve,” said Stringer. “Marijuana has been around for decades, it’s the underground economy. The state and city get no economic benefit from it. We don’t have an opportunity to regulate it.”
“We should explore this,” he added. “We don’t have all the answers. We have a lot of work to do on this.”
Stringer told CNBC that legalizing marijuana could also potentially increase tourism like it has in Colorado and Washington State.
Last month, Sen. Chuck Schumer (D-NY), the Senate Minority Leader, announced he intended to introduce a bill to decriminalize marijuana nationwide.
A new statewide poll by Quinnipiac University found that 63 percent of voters in New York State are in support of total marijuana legalization, the highest level of support recorded.