The Economic Impact Of Legalizing Marijuana
What is a drug? A drug is “a chemical substance used in the treatment, cure, prevention, or diagnosis of disease or used to otherwise enhance physical or mental well-being” (Drug, n.d). We the people have established that marijuana is an illegal drug. Lately around the United States we are starting to change the rules for that. There are states that have deemed it O.K. to sell marijuana to the public for health reasons. With this happening a lot of things are being brought up. One of the main topics that come up is the economic value that this revenue will generate and how it will affect the states.
The legalization of marijuana will have a huge impact on the economics of the United States to the point that I feel that government will assist in the continuation of these companies. If it is passed in the government the selling of marijuana could generate millions of dollars in tax revenue. Colorado is the latest state that has approved the selling of marijuana for recreational use. This topic has been tossed around by the officials for years now. Legislators in Colorado have “consider excise and sales taxes on marijuana of up to 30 percent combined” (Frosch, 2013). With the rapidly growing market and marijuana industry rules and regulations had to be put into place. Even this tax charge needs to be implemented and enforced. “These taxes are set high enough to finance the administration of new laws, but not so high that customers are driven back to the black market” (Frosch, 2013). There are many financial benefits as a state can help pay for the enforcement and other fundamental issues. One bad thing about taxing so high is that you can simply crowd out the regulated market. It is important to find the right balance for this item.
A great outcome of the selling of marijuana is that they are using is for the public of the state. “The first 40 million collected from a 15 percent excise tax would be used to build public schools” (Frosch, 2013). Not everyone is certain that the tax is a good idea. Of course, you cannot please everyone and someone has to be against it. Michael Elliott, executive director of the Medical Marijuana Industry Group stated, “I feared that too heavy a tax could make it hard for any marijuana business to survive, because Colorado’s black market is so entrenched” (Frosch, 2013). Even businesses that sell medical marijuana that as of right now do not have to pay this tax will if they convert to selling it for recreational use. This of course is deemed by the laws being passed. Even if lawmakers pass the tax proposal, it will still require voter approval. All tax increase are subject to a popular vote.
Having these taxes so high will keep people searching for a cheaper and better outcome. The black market will stay in business just because lawmakers want to set such a high tax. If the set the tax lower they can possibly shut out the black market and keep a better control of the selling of...