Marijuana Tax Revenue is Going to Collapse

The arrival of 2017 will bring many changes to the country, including falling marijuana prices in states that have legalized a recreational market. Cannabis users may cheer this news, but it heralds the start of an enduring budgetary headache for states that tax legal marijuana sales based solely on price.

For more on coming collapse marijuana tax revenue, see my latest piece at Washington Post Wonkblog.

Author: Keith Humphreys

Keith Humphreys is the Esther Ting Memorial Professor of Psychiatry at Stanford University and an Honorary Professor of Psychiatry at Kings College London. His research, teaching and writing have focused on addictive disorders, self-help organizations (e.g., breast cancer support groups, Alcoholics Anonymous), evaluation research methods, and public policy related to health care, mental illness, veterans, drugs, crime and correctional systems. Professor Humphreys' over 300 scholarly articles, monographs and books have been cited over thirteen thousand times by scientific colleagues. He is a regular contributor to Washington Post and has also written for the New York Times, Wall Street Journal, Washington Monthly, San Francisco Chronicle, The Guardian (UK), The Telegraph (UK), Times Higher Education (UK), Crossbow (UK) and other media outlets.

2 thoughts on “Marijuana Tax Revenue is Going to Collapse”

  1. I think this is a related question and I wonder if you have looked at it as well. There is some evidence that cannabis is a substitute good for alcohol. The Colorado Department of Revenue has data on alcohol sales and I would expect that they would also be affected by retail cannabis. If those retail prices fall, I would expect the substitution effect to increase and for alcohol revenues to fall due to decreased sales at the same time that cannabis revenue falls due to decreases in price. But this is all speculation.

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