California Governor Jerry Brown says recreational marijuana will be a big boon for the state's tax coffers this year. In a new budget released by Brown's office, the state estimated it could receive as much as $643 million from new excise taxes during the first full year of legalization in the Golden State.
“The amount and timing of revenues generated from the new taxes are uncertain and will depend on various factors including local regulations, and cannabis price and consumption changes in a legal environment,” Brown’s budget says.
Officials say that number will grow as more cities work out issues regarding regulation of pot shops in their jurisdictions. Previous estimates showed recreational weed in California could eventually bring in $1 billion annually to the state's treasury.
Recreational marijuana became legal for purchase on Jan. 1st for California residents. People purchasing marijuana pay an additional 15% excise tax on retail sales to 5%.
The massive windfall for the state's coffers means more money for youth treatment and prevention, environmental protections, and investment in communities that have been harmed by the war on drugs.
At least $15 million is earmarked for universities and the California Highway Patrol to study the impact of marijuana.
Another $50 million is being allocated for grants to local health departments and community-based nonprofits that support job placement, mental health treatment, substance use disorders, as well as other social programs.
Among other programs the marijuana tax revenue will support: youth programs, including drug education, prevention and treatment, preventing and alleviating damage caused by illegal marijuana producers, as well as programs designed to reduce driving under the influence of marijuana.
The tax rate on legal weed is scheduled to be reviewed by the state's Legislative Analyst's office in 2020.
Photo: Getty Images