States banking on a consistent flow of revenue from the legalization of marijuana should slow their roll, according to a new report. That’s because the industry is too new for budget analysts to produce estimates that legislators can have confidence in.
“In Nevada’s first six months of collecting marijuana taxes, revenue came in 40 percent higher than budget officials expected, but in neighboring California revenue was 45 percent below projections in the first six months of collecting marijuana taxes,” the Pew Charitable Trusts report concludes.
“With more states considering legalizing marijuana, forecasting and budgeting difficulties for revenue from recreational marijuana taxes are likely to become widespread,” researchers added.
Forecasting misfires can have consequences for states that hope the legalization of marijuana will allow them to boost spending on government programs, the report warned.
The analysis comes as Maryland and dozens of other states contemplate legalizing pot for adult use. Eleven states and Washington, D.C., have already done so.
In Maryland, the Kirwan Commission has struggled to find a revenue stream for its ambitious educational reforms, leading many policymakers to speculate that a “pot for tots” play may be in the offing. That seems less likely given the revenue rollercoaster being experienced by the early-adopter states.
In a briefing for legislators on Monday, William C. Tilburg, director of Policy and Government Relations at the Maryland Medical Cannabis Commission, said it’s impossible to know how many of the people who use marijuana illegally will would shift to storefront product.
“This has been an illegal drug for decades,” he told the state legislature’s Marijuana Legalization Workgroup. “There’s not good data on how many individuals and the types of individuals that would purchase retail cannabis.”
Tilburg said legal weed tends to be more expensive, because retailers have to pay licensing fees and put their product