If there’s a series of undeniable facts about cannabis legalization that the most strict prohibitionists will continue to deny are the economic benefits of legalizing this massively popular and medically utilized crop. American states that have legalized cannabis recreationally have seen astronomical amounts of total retail sales and subsequent tax revenue raised for the state. At its financial peak in the immediate post-pandemic year of 2021, California sold approximately $5.7 billion in total retail cannabis sales while Oregon sold nearly $1.2 billion in cannabis.
Even in smaller states that aren’t so immediately synonymous with cannabis culture and history as California is, the total dollar amount of retail products sold and tax revenue is still certainly considerable. In the secluded state of Maine for instance that has an overall state population of less than that of San Diego, the Pine Tree State still sold $158 million in total retail sales in 2022. What’s most notable about this exponentially higher than expected figure is that it’s actually an increase of a staggering 93.8 percent from the previous year’s sales of $81.8 million.
In total, MJBizDaily estimates that the American cannabis industry will reach $33.6 billion in 2023 and will increase by several more billions with every passing year. And unsurprisingly as the most recent state to recreationally legalize cannabis, Minnesota is already seeing tremendous economic benefits because of that decision even within the first month of recreational sales. During just the first month of adult-use cannabis sales, The Land of 10,000 Lakes has generated a substantial approximate of $600,000 in tax revenue. This noticeable amount of tax revenue was almost guaranteed given the relaxed and very generous nature of Minnesota’s cannabis laws in comparison to not only their neighboring states but also other Legal States too.
Geographically, Minnesota is surrounded by states with far stricter policies on cannabis possession and consumption and it’s the only state with fully legal cannabis in its corner of America. None of Minnesota’s neighboring states, the Dakotas, Iowa and Wisconsin, have legal recreational cannabis policies and South Dakota Governor Kristi Noem used her powers to essentially overturn 2021’s Amendment A, which would have fully legalized cannabis in that state.
In the literally cheesiest state in America, Wisconsin GOP senators rejected two amendments to a June budget bill that would have legalized cannabis in the state. Voting along party lines yet likely going against the wishes of the majority of their constituents, the GOP members of the Wisconsin Senate stopped the creation of an industry that would’ve generated an estimated $165 million in the first year’s tax revenue according to the state Democrats. Minneapolis Cannabis Lawyer, Aaron John states, “One can presume that the amount of out-of-state traffic that Minnesota dispensaries receive is considerable and the state has the added advantage of having multiple dispensaries right on the state border of those still prohibitionist states.”
And given that it doesn’t seem likely in the near future that any of these states may be even considering changing their policy on cannabis, Minnesota will be able to enjoy this particular economic advantage that perfectly showcases the ridiculousness of interstate cannabis laws.
Secondly, Minnesota’s cannabis tax rate of only 10 percent is a far more conservative tax rate than Nevada’s much higher 25 percent and Washington’s absurd 37 percent. That significantly lower tax rate and the daily purchasing limits allowing for up to two ounces of flower and 8 grams of concentrate products may serve as a set of incentives for cannabis consumers to purchase more cannabis products overall.
The recent projections from the Minnesota Department of Revenue is certainly noteworthy. By fiscal year 2024, approximately $15.4 million in total tax revenue will be raised with an exponential rise to $50 million for FY2025 and a lucrative $84 million for FY 2026.
The act (legalization bill) dedicates 20% of revenues from the gross receipts tax to the newly established local government cannabis aid account in the Special Revenue Fund.” the report explained. “The remaining revenues from the gross receipts tax is deposited in the General Fund.”
Given all these economic and geographic advantages that Minnesota now has given their decision to legalize cannabis, The Land of 10,000 Lakes may soon become an upper Midwest haven for cannabis industry and activity.