Is Legalizing Pot A Quick Fix For State Budget Woes? This Study Says ‘No’

Cannabis legalization advocates often tout the plant’s potential to boost state coffers. Among the case studies they cite are Illinois, which reported $52 million in marijuana tax revenue for the first half of 2020; Colorado, which collected more than $244 million from January to August; and California, which is expected to bring in $479 million in pot tax revenue for the year.

With so many businesses struggling throughout 2020 due to the COVID-19 pandemic, it makes sense to legalize weed to address dwindling government funds — right?

Wrong, according to a new study from Anderson Economic Group.

Indeed, the coronavirus pandemic has taken a toll on state budgets across the country, sending local leaders and lawmakers scrambling to find solutions and supplement revenues. But “legalizing recreational cannabis is not a panacea for the immediate shortfalls most states are facing,” AEG’s Andrew Miller and Kaitlin Lynch wrote in a report published Tuesday.

‘Significant Time Lag’

Today, 33 states allow medicinal marijuana use, and they generate tax revenue in their own right. Yet there is often a significant time lag between legalization and the first actual cannabis sales.

“It can …

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