cannabis tax revenue
cannabis tax revenue

Where Do Cannabis Tax Dollars End Up Going? - Combating Bullying, Homelessness, Drug Abuse, and More!

Where are states putting their cannabis tax dollars to work?

Posted by:
Joseph Billions on Tuesday Jul 12, 2022

cannabis tax revenue

Cannabis Tax Dollars: Combating Homelessness, Bullying & More

If you reside in any cannabis legal state, odds are you've been affected by the income generated by the cannabis industry in at least one way. Regulatory commissions in several states are approving and issuing permits to interested applicants at a reasonable rate, resulting in cannabis stores and facilities in different locations within the states.


Every cannabis legal state enjoys huge tax revenues from its resident cannabis-related businesses. As with most generated taxes in these states, the cannabis tax dollars are being invested back into the economy as soon as they're generated. Truth be told, it is no longer financially wise for States to ignore the little green plant. If not for anything, non-legal states could consider the wonders cannabis tax dollars could help create if they legalize the plant and its sales.


Revenues Made for States and Local Governments from Cannabis Taxes

States like California, Alaska, Colorado, Michigan, Massachusetts, Oregon, and Illinois generate billions of dollars in taxes annually from their legal cannabis industries. It is worth noting that some legal states do not regulate or tax cannabis sales, especially those that only have medical cannabis industries.


The States of Colorado and Washington began collecting cannabis taxes in 2014. Before the COVID-19 pandemic outbreak, both states were generating an estimate of $450 million annually in state cannabis tax, which was equivalent to 1 percent of the state's revenue. Other states like Oregon, California, Alaska, and Nevada recorded $95 million, $354 million, $15 million, and $87 million, respectively, in 2018.


Over the years, states have released statements showing the purpose these cannabis tax dollars have been utilized for. For example, Colorado spends most of its cannabis tax on constructing or renovating schools, providing scholarships for residents of disadvantaged and low-income communities, providing marijuana education, and creating rehabilitation and addiction prevention centers.


How States Use Cannabis Tax Dollars

Marijuana revenue is being used to bring rays of hope to communities that the war on drugs has ravaged. Major states are putting these funds to work in the most positive way possible. With this fund, most state governments believe they can effectively put a gradual end to the stigma surrounding cannabis use one project at a time. 


Anti-Bullying Campaigns

Colorado has an active anti-bullying program annually funded by the state's cannabis tax dollars. This program is considered one of the best in the country. It has received local and national praise from parents, alumni, teachers, and other watchdog groups for its usefulness in the school system today.


On November 3, 2015, Colorado voters approved Proposition BB. According to this proposal, the state can keep the extra revenue from marijuana sales, which amounted to about $66 million in 2016. It funds neighborhood initiatives like anti-bullying lessons for the top schools.


Schools had to apply for the grant to be considered for the program. In 2017, 50 schools were first selected to benefit from pot tax dollars in the state. Since then, there has been a significant drop in students being the target of bullying in schools (as reported by the Colorado education department).


Combating Homelessness

Last year, a proposal to donate up to $2 million annually in cannabis business sales tax proceeds to assist the homeless population was authorized by the Las Vegas Clark County commissioners. The money was distributed to three neighborhood non-profit groups  (Lutheran Social Services, Hopelink, and Help of Southern Nevada) that assist homeless people in the Las Vegas area.


In Colorado, about $4.5 million in tax revenues was committed some years ago by the City of Aurora to eliminate homelessness. The Colfax Community Network is in charge of Colorado's homeless programs.


As the population continues to increase, the homeless population will also increase. This is a prompt for state officials to act toward preventing homelessness.


Supporting School Buildings

Early this year, Oklahoma gave out millions of cannabis tax dollars to underfunded communities to erect and improve existing school structures.


Through the Redbud program, Dove Charter Schools in Oklahoma City earned more than $500,000. The amount raised by the Harding Independence Charter District was over $300,000. Even the tiny Sovereign Community School charter in Oklahoma City brought in roughly $33,000.


A grant worth roughly $1.3 million was given to Santa Fe South Charter Schools. According to Chris Brewster, the administrator of Santa Fe South schools, that money may be converted into the financial resources required to construct athletic fields or an auditorium, facilities that many charter schools lack.


Spreading The Word On Cannabis Safety

Now that recreational cannabis legalization is getting accepted widely, States understand that it is in the best interest of all municipalities to establish programs that teach youths and adults about the health benefits and risks of cannabis use. These programs are not restricted to cannabis consumers alone. Everyone is urged to learn accurate information about cannabis. Colorado has allocated millions of cannabis revenues toward cannabis education programs.


Putting Low-Income Students Through College

Not only are statues placing students in free and reduced lunch programs, but they're also making a few of them eligible for four-year scholarships in college. These scholarships are worth an average of $5,000 each year. The more pot tax dollar generated, the higher the number of students benefitting from these programs.


More Details

Every state has charted a division formula for its pot tax. Some have specific programs that solely benefit from these taxes.


Alaska's pot tax dollar is split between its general fund's program and another program committed to reducing cannabis-related crimes in the state. While California uses it to fund all admistrative costs expended in cannabis legalization. Excess cannabis tax revenues are used to sponsor programs focused on youth and economic development.


In Nevada, education programs are prioritized, while Washington and Massachusetts dedicated their pot tax dollars to providing the best health care possible for their residents.


Bottom Line

When allocating cannabis tax money in most states, public schools come first. In Colorado, the construction of public schools is funded with the first $40 million of cannabis excise taxes each year. Local governments, initiatives providing affordable housing, and those dealing with substance addiction receive additional funding. It is uplifting to see money generated from what was once considered "a bad drug" used for funding positive programs.





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