WASHINGTON, DC – The effort exerted in creating a medical as well as recreational marijuana market has paid off. After legalization, sales in various states were amplified because of the continuously increasing marijuana sales.
Twenty-nine states all throughout the US including D.C. already have laws with regards to medical marijuana while eight states are creating recreational marijuana markets. The challenge with adapting medical and recreational marijuana in a state is the structuring of the market. However, this challenge can prove to be worth it due to the high revenues as a result of the consolidated marijuana sales.
According to GreenWave Advisors, a marijuana advisory firm, the projected taxes by marijuana sales reached about $1.6 billion for state tax just last year. The company’s representative, Matt Karnes, added that this amount could reach up to $4 billion of marijuana sales taxes by 2021.
The advocates of legalizing marijuana are pointing out the possible upsurge in the state tax revenue coming from marijuana sales to support their stand on the matter. They claimed that billions of dollars could be added to the current tax revenue, hence, making this their major selling point.
From the data provided by GreenWave Advisors, it states that there was a 35% increases in the 2016 marijuana sales compared to that of 2015. The total retail of cannabis reached $6.5 billion dollars in 2016 alone. It was proven that most of these sales are from medical marijuana usage.
Karnes specified that if there is a 25% sales tax on retail pot sales, then the collected retail sales taxes sums up to 1.6$ billion in 2016. This amount comprises the $450 million collected in states which have recreational laws.
Looking at Colorado’s sales, the state was able to collect $1.67 million in excise and sales taxes in February. From the states with 10% retail special marijuana taxes, they were able to raise $8.2 million. Another $5.5 million was raised from the marijuana excise tax which is at 15%. As for the 2.9% medical marijuana sales tax, the states raised 3 million dollars.
This massive increase in state taxes is one of the prime needle-mover in Washington. With the recent calculations, it showed that in July 2016, an amount of $64.2 million will be gathered due to taxable marijuana retail sales. This means that they will get about $4.17 million for the state sales tax.
There are already some people who want to invest in marijuana stocks, but according to experts, they could be taking huge risks. It is recommended that instead of looking into small, pure-play marijuana stocks, you can try to consider bigger companies which may benefit from the legalization of cannabis.
You can check out companies like Scotts-Miracle Gro or GW Pharmaceuticals plc. Both of these companies may benefit a lot when more areas legalize the use of marijuana. Scotts-Miracle Gro is a gardening and herbicide company that sells hydroponics equipment and supply. GW Pharmaceuticals plc, on the other hand, is formulating medicines using cannabis to treat seizures.
The legalization of marijuana will not only benefit the government but also regular citizens like you. Investing in various companies which may profit from this law could be an excellent opportunity.