The Washington state legal recreational marijuana market has been open for approximately one year and is already having a significant impact on the state’s economy. The program got off to a slow start with just a handful of stores selling high-priced pot to long lines of customers. Fast forward one year and the state has about 160 shops open, higher than expected tax revenues and averages more than $1.4 million in revenue per day.
Fixing the flaws
The state’s marijuana program has its flaws and many cultivators, processors and retailers have complained about the high taxes and the unregulated medical marijuana market. These issues, however, will be alleviated by two recently enacted laws that will go into effect this month.
One of the laws will create a system to regulate and tax medical marijuana. The other law will cut Washington’s three-level excise tax on pot to a single 37% tax.
First year exceeds expectations
During the last year, Washington state generated over $250 million in revenue from marijuana sales. The state received approximately $62 million in taxes from marijuana sales which is significantly higher than the $32 million forecasted by the state. If you combine state and local sales taxes as well as other taxes, the total tax revenue received by state and local governments was over $70 million.
Despite some industry gripes and those tweaks to Washington’s legal pot law, officials and legalization backers say the state’s slow and deliberate effort to regulate marijuana has been a success.
This is just the beginning
The United States has a problem. Many states are cash poor and are struggling to find new sources of revenue which create jobs and are not detrimental to the environment. Colorado and Washington have the solution to this problem and it is called marijuana.
Colorado and Washington generated around $1 billion in revenue from marijuana during their first year! The industry is in the first inning of what will be a multi decade growth cycle. We expect these numbers to continue to increase year over year as the market develops and new businesses open.
It is also important to note that these numbers only take into account the actual sale of marijuana and not for the revenue generated by ancillary businesses such as grow lights, soil, vaporizers, security equipment, and other products and/or services.