Weed, Feed, And Need

Turns out that even recreational marijuana is a secondary expense in states where weed is taxed, because unlike murderously addictive nicotine products, when inflation is high and people have to tighten their belts, getting baked takes a back seat to getting baked goods.

Marijuana tax collections dropped in several states this year as the cannabis industry struggles with low prices and a drop in demand.

California, Colorado, Nevada, Oregon and Washington all collected less marijuana tax money in fiscal 2022 than the year before, according to a report from the Urban-Brookings Tax Policy Center, a joint venture between two Washington, D.C. think tanks. Most states end their fiscal years on June 30.

That means those states had millions less this past fiscal year to pay for school buildings, drug treatment programs, law enforcement and other services partly funded by taxing pot sales.

Tax revenue may fall even further this fiscal year. Some analysts say the downturn is a reminder that cannabis is an agricultural crop, not a guaranteed moneymaker.

The potential tax revenue “was always oversold as sort of a panacea to state budgets,” said Adam Koh, editorial director of Cannabis Benchmarks, a company that tracks wholesale cannabis prices.

Colorado collected about $370 million in marijuana taxes in fiscal 2022, about 13% less than fiscal 2021.

“We’re anticipating another pretty sizable decline for [fiscal 2023] as well, close to 16%,” said Jeff Stupak, a senior economist with the Legislative Council Staff, a nonpartisan team that advises the Colorado legislature.

 

So like cigs, lotteries, and vaping, vice taxes only work when people have the money to pay for vices.  And when you tie education, library, and other public good funding to vices, well, they get underfunded when the appetite for it goes down.

It's a trap, but here we are.