Colorado's financial success has demonstrated to the other states in the union that legalizing pot is not only financially viable, but legally sound. Decreased recidivism and increased financial gain are just two of the many benefits that states like Colorado experience when they legalize — or, at the very least, decriminalize — marijuana.
In fact, recent studies have indicated that states are actually losing money when they keep pot illegal. According to a study by the Tax Foundation — an independent organization with no political affiliations — the average state loses more than $20 billion per year because the pot business is kept underground, illegal and not taxable. The Tax Foundation's research had many interesting findings, including:
- The average Federal tax on marijuana is about $23 per pound, which is the same amount of tax that's being placed on tobacco. At current estimates, this means that the average state can experience a tax influx of about $500 million per year.
- States can also apply a ten percent sales tax on marijuana, which would lead to an influx of about $2.3 billion per year per state.
- Of the $28 billion in tax revenue already generated by marijuana for Federal, state and local governments, $7 billion alone is strictly Federal revenue, and $5.5 billion is from business taxes.
- Currently, only Colorado and Washington have lenient marijuana laws — laws that are lenient enough to turn marijuana into a multi-billion dollar industry. If other states legalized marijuana in the same way that Colorado and Washington have, they could expect to see an increase in income in the billions, with a typical income increase between $5 billion and $18 billion.
The researchers concede that the biggest benefit to legalizing marijuana, outside of the financial revenue generated, is the reduced recidivism and criminality brought about as a result of legalizing marijuana. "Legalizing marijuana will drastically reduce the risk involved in producing marijuana, which reduces the required return to engage in the activity. The lower risk should increase the entrance of new entrepreneurs into the market, which increases supply and forces down prices," said study author Gavin Ekins.
So why do states keep marijuana illegal? Lee Fang of The Nation has extensively studied this phenomenon, and he came up with only one conclusion: legalizing pot negatively affects the pharmaceutical industry's bottom line. To be more specific, more people die as a result of painkiller addiction than they do as a result of either heroin or cocaine addiction. Moreover, no one has ever died of an addiction to marijuana. Yet, much of today's anti-drug campaigning — including the seemingly endless "warnings" from the Partnership for Drug-Free Kids (formerly known as the Partnership for a Drug-Free America) — is funded by Big Pharma, and includes the increased promotion of costly rehab for painkiller addiction (and other addictions, of course).
In other words Big Pharma's bottom line is more important than pot's bottom line...to the point that states are actually forced to lose money in order to put it in the pharmaceutical industry's pockets, according to Fang. "Some marijuana advocates see the fight against Prohibition as a guide, since so many interest groups working to maintain the status quo today are tied to cash flows — whether federal grants or forfeiture revenues — that depend on keeping the drug illegal," he said.