by Caleb Talley
For some, the legalization of medical marijuana simply represented an opportunity for “dope smokers ” to get their hands on a cheaper, more readily available product. It represented the deterioration of certain norms that have been propped up by years of propaganda.
On this issue, misunderstanding has led many to completely miss just how beneficial medical marijuana can be to the state of Arkansas.
For a cash-strapped state government, medical marijuana could be the source of revenue lawmakers have been looking for.
I’ve heard legislators call for a tax increase on fuel. We’ve also seen reforms to roll back Medicaid. But we’ve heard very little on the incredible possibilities that taxes on medical marijuana presents.
To get a better understanding of how much revenue the state could stand to gain from taxing medical marijuana, legislators should look to a state that has been doing it for years: Colorado.
According to The Tax Foundation, the nation’s leading independent tax policy research organization, marijuana tax collections in Colorado exceeded all estimates in recent years.
In 2014, sales of medical marijuana surpassed $385 million. From that, more than $41.8 million was collected for state tax revenues. In 2015, the sale of medical marijuana jumped to more than $408 million, which generated an additional $57.4 million in tax revenue.
A percentage of that tax revenue in is earmarked to be spent on public schools throughout the state. In 2015 and 2016, Colorado raised more than $48.3 million dollars for schools.
According to The Tax Foundation, a mature marijuana industry could generate up to $28 billion a year in tax revenues for federal, state and local governments. They project that business incomes from marijuana production would initially raise almost $5.5 billion in federal revenues, and $1.5 billion in state and local revenues.
Individual income taxes and payroll taxes from labor in the marijuana industry could contribute approximately $1.5 billion in federal revenues and an additional $1 billion in state and local revenues. And these revenues would increase as production expanded over time. State taxes on marijuana similar to Colorado’s rate could increase state tax revenues by $13 billion nationally, with an additional $5 billion from normal sales taxes.
Given that alcohol, which kills 88,000 people each year, is legal and marijuana, which has killed no one, is not, it would seem that a lot of revenue is being left on the table. But the cost of marijuana prohibition is not just measured by the loss of potential tax revenue. According to a Harvard University study, the federal government spends approximately $10 to 14 billion a year just to enforce marijuana laws. The same report indicates that the cost to local governments is approximately $211 million.
But for critics, the fiscal benefits of medical marijuana to the state do not outweigh the perceived threat it poses to society. And as the Supreme Court case over the method in which growing licenses were awarded unfolds, critics are likely emboldened by the apparent corruption.
It’s that corruption that’s keeping medical marijuana out of the hands of people like Charlotte Figi, whose early childhood was defined by constant, hour-long seizures. When Charlotte was two, she was diagnosed with Dravet Syndrome, a severe form of intractable epilepsy. As an infant, she was on seven different drugs, some of which were heavy-duty and came with side effects that risked hindering brain development.
As a result of her constant seizures – approximately 300 a week – and her heavy doses of medication, Charlotte began to decline cognitively. She lost the ability to walk, talk and eat. On more than one occasion, her heart had stopped, and by the age of five, her parents had signed a do-not-resuscitate order. Doctors had suggested putting her in a medically induced coma to give her young body a rest.
After years of research and consultation with multiple physicians, Charlotte’s parents finally decided to experiment with small doses of a cannabis oil extract. The results stunned them. By the age of 6, Charlotte went from having 300 seizures a week to two or three seizures a month. Not only did she regain the ability to walk, but she also learned to ride a bike, feed herself and talk. Medical marijuana allowed Charlotte to thrive. Her parents went from fearing their daughter’s death to hearing their daughter laugh for the first time in years.
Charlotte’s case was not just a flash in the pan, either. In 2016, the Lurie Children’s Hospital of Chicago released a landmark study that showed how significant medical marijuana had been in reducing seizures in severely epileptic children. The study involved patients aged 2 to 18 with medically resistant seizures. Among patients that received the marijuana derived medicine, convulsive seizures were reduced by more than 39 percent.
It’s possible more impactful medical studies would exist if it weren’t so difficult to gain approval for them. Because it is not FDA approved, scientists must jump through countless hoops just to perform the simplest marijuana-related studies. And going around the government to perform such research could result in the loss of funding or even jail time.
But despite the DEA and the FDA’s hardline approach to marijuana, the Centers for Disease Control has taken notice of its potential.
The CDC conceded that cannabinoids derived from marijuana were extremely effective in treating chemotherapy-related pain and nausea. It’s also been shown to relieve anxiety and loss of appetite. But the most eye-opening admission the CDC made was that cannabis has actually been shown to kill cancer cells. That’s right. Cannabis can kill cancer cells.
As we wait for the web of corruption surrounding the state’s medical marijuana licensing to unravel, we lose valuable tax dollars and, more importantly, we keep a valuable medicine from those who may desperately need it.
In Cash & Candor, Arkansas Money & Politics / AY Magazine Editor Caleb Talley aims to shoot it straight when it comes to business and politics in and around the Natural State. Talley comes to AMP by way of the Arkansas Delta, where he called balls and strikes at the Forrest City Times-Herald. He can be contacted by email at firstname.lastname@example.org. Read more Cash & Candor here.