Study Shows Pot Legalization Could Add $113 Million in Tax Revenue for AZ

By: Lorin McLain

A new study on pot legalization in Arizona is giving plenty of fuel to advocates pushing to get it on the ballot in November. The non-partisan Tax Foundation says the state could reap as much as $113 million in new tax revenue if marijuana is legalized for recreational use and taxed 15 percent. The study comes as a legalization effort prepares a petition to get the issue in front of voters next fall.

The Campaign to Regulate Marijuana Like Alcohol wants voters to legalize pot for recreational use and claims to have more than 200,000 valid signatures to put the measure on the ballot in the fall – 50,000 more than the minimum requirement. The proposed Regulation and Taxation of Marijuana Acts calls for establishing licensed stores where pot sales would be taxed at 15 percent. The proceeds would fund education, and programs like all-day kindergarten and public health initiatives. Adults 21 and older could possess up to one ounce of marijuana and could grow up to six plants in their homes without a license. The act also calls for creating a Department of Marijuana Licenses and Control to regulate the drug.

The Tax Foundation estimates Arizona would rake in $113 million a year if pot is taxed at 15 percent, $150 million a year if taxed at 20 percent, and $188 million a year if taxed at 25 percent. The figures are based on sales per capita in the first states to legalize it for recreational use, Colorado and Washington. The study cautions that it took some time to generate revenues, given the roll out to set up regulatory systems.

The movement is not without its objectors. The chairman of Arizonans for Responsible Drug Policy calls legalization “bad public policy,” and says the study doesn’t take into account the costs incurred if pot is legal. ARDP Chairman Seth Leibohn says what’s not figured into the scenario is what the state would shell out to pay for treatment and rehabilitation services, counseling, accidents, and criminal violations. The ARDP website on Tuesday posted a tweet from Colorado’s director of marijuana coordination where he says most of the state’s pot proceeds are going to the cost of regulation. Still, supporters argue at the bare minimum it keeps millions of dollars in government coffers rather than landing in the hands of drug cartels.

ARDP commissioned a poll taken last month showing 49 percent of 500 voters surveyed said they would reject legalizing marijuana legalization. Forty-three percent supported it, while eight percent were undecided. Other polls show a closer split. The Morrison Institute out of Arizona State University released a poll in December showing 51 percent against, and 49 percent supporting. That’s with a three percent margin of error.