The mistake most states made when legalizing marijuana
Legalization states with taxes based entirely on marijuana’s price have fiscal and political challenges ahead of them
Wednesday, January 18, 2017
The arrival of 2017 will bring many changes to the country, including falling marijuana prices in states that have legalized a recreational market. Cannabis users may cheer this news, but it heralds the start of an enduring budgetary headache for states that tax legal marijuana sales based solely on price. The marked descent of post-legalization prices was predicted by most marijuana policy experts. Colorado, like Oregon, Washington, Nevada, Massachusetts and Maine, taxes marijuana as a percentage of the drug’s price. For these six states, sinking prices translate automatically into sinking tax revenue per sale.