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Marijuana legalization could inject over $130 billion into US tax coffers by 2025 — if the Trump administration stays hands-off

The cannabis industry could be a federal tax windfall — provided the Trump Administration doesn't stamp it out.

  • A report from New Frontier Data estimates the cannabis industry could generate $131.8 billion in federal tax revenue and add 1.1 million jobs by 2025 if it's legalized for adult use in all 50 states.
  • If the US were to legalize cannabis federally today, it would add 782,000 jobs to the economy, according to the study.
  • The country could be leaving billions in tax revenue on the table if it keeps the status quo patchwork of state laws , rather than coherent federal regulations.
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Marijuana legalization could create $132 billion in federal tax revenue and inject over a million jobs into the US labor market by 2025 if it becomes legal nationwide, a new study says.

The study, from cannabis industry analytics firm New Frontier Data, seeks to estimate the total economic impact of the nascent industry. Cannabis is legal in eight states, including California, which legalized recreational sales on January 1. Vermont is likely to join that list once Gov. Phil Scott signs a bill legalizing the possession of up to one ounce of marijuana into law.

The study assumes the tax revenue, which will add $131.8 billion cumulatively to the US Treasury by 2025, will come from a 15% retail tax, payroll tax deductions, and a 35% business tax. Sales tax alone on cannabis would add $51.7 billion to US coffers between 2017 and 2025.

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While commercial cannabis markets are up-and-running in eight states, the federal government can't collect any taxes on the industry since cannabis is considered an illegal, Schedule I drug. That means cannabis would be an entirely new revenue source for the US government.

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Public opinion seems to be on the cannabis industry's side. Some 58% of voters said in a Quinnipiac poll on Thursday that marijuana should be legal, and 70% of voters oppose enforcing federal laws in states that have made marijuana legal.

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