How Much?! Washington Adds $300M+ in Legal MJ Taxes

Washington’s cannabis sales in the first nine months of 2017 generated more than $300 million in tax revenue, which is primarily being used to pay for public services.

In yet another indication of the nation’s booming cannabis industry, it took only nine months for the state of Washington to pass the $1 billion mark in cannabis sales in 2017. According to data released by the Washington State Liquor and Cannabis Board, the state’s nine months of sales brought in to more than $300 million in tax revenue for the state.

Washington was one of the first of now eight U.S. states to legalize adult use marijuana. After legalizing medical marijuana in 1999, state voters approved Initiative 502 in 2012 to legalize and regulate recreational cannabis.

Washington’s adult use market has continued to climb since it became operational in 2014, and it’s now averaging over $4.8 million in sales and $1 million in tax revenue every single day. The state’s recreational cannabis law imposes a 37 percent excise tax and 9.6 percent sales tax, while medical marijuana patients are only subject to the excise tax.

A portion of the generated tax revenue goes to the Liquor and Cannabis Control Board to oversee sales and collect taxes. Most of it – more than 60 percent — goes to:

  • Education and youth programs
  • Substance abuse prevention and treatment
  • Community health centers
  • Washington state’s share of Medicaid

Any leftover tax income goes into the state’s general fund.

Revenues Up, Teen Use Down

Washington’s nine-month sales total of $1,101,853,539 comes over $16M short of Colorado’s $1,118,207,832 in sales over the same period. Colorado, the very first state to legalize recreational marijuana and implement its program, has dominated the nation’s legal recreational market from the beginning, but sales in Washington actually exceeded those of Colorado for a few months in 2016.

While sales fluctuate month-to-month, the latest batch of market data reveals that Washington’s cannabis industry has broken a number of its own sales records over the past months, with monthly sales over that period exceeding $130 million.

The release of the newest sales numbers follow the publication of a report from the Washington State Institute for Public Policy, which revealed than teen cannabis use has decreased since the passage and implementation of Initiative 502. The adolescents also reported that they feel it is more difficult to access marijuana since legalization. The report from the Washington think tank also found a drop in the number of admissions for publicly funded cannabis treatments since the adult use law was implemented.

Under Washington’s recreational marijuana law, adults aged 21 and older can legally purchase, possess, and use up to 1 ounce of marijuana, 16 ounces of solid marijuana infused products, and 72 ounces of liquid marijuana infused products.

Despite legalization, Washington cities like Seattle are still struggling to adequately combat the underground illicit market, which has been estimated to still account for about 30 percent of the state’s total cannabis pie. Part of the problem is that legal cannabis grown in states like Washington is being shipped to states where marijuana is still illegal and fetching exorbitant prices, as smugglers take advantage of the nation’s patchwork of laws.

Learn More About Legalization

Support for marijuana legalization in the U.S. swelled in 2016 and is now at its highest point ever. As of now, 29 states have legalized medical marijuana, while eight have legalized marijuana for recreational use. Market analysts have predicted that legalization will extend to all 50 states by 2021.

Learn more about marijuana laws in the U.S. through our education page or keep up with the booming legal cannabis industry by visiting our news feed.

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