Coalition406 study reveals marijuana treasure for the Treasure state
Based on available data from official Montana Marijuana Program stats and other states’ data, marijuana’s potential impact on the state budget could be as much as $50 million dollars a year with more conservative estimates pointing to a cumulative $100 million dollars in new tax revenue in the first five years after ending marijuana prohibition in Montana.
Other states have focused largely on education funding in their marijuana tax dollar allocation. Montana budget analysis shows that priority areas of the state budget are healthcare, education, and infrastructure.
While statewide sales tax for marijuana will go towards these three items, additional local taxes may be levied that have a more diffused impact from local road maintenance to purchasing police cruisers, ambulances, and fire trucks.
2017 medical marijuana sales in Montana were $32 million for 31,000 registered patients.
Assuming the legal recreational market for marijuana is similar to other recent legalized states and adjusting for population differences, the marijuana market in Montana will be roughly three – four times the number of the state’s medical marijuana population or 100,000 estimated customers and will increase incrementally for the first 5 years before stabilizing.
Assuming 100,000 retail customers in the first year then increasing annually until the numbers level off at year 5 after marijuana legalization, then the following figures would be a reasonable estimate of tax revenue. Estimated state/local tax revenue for legal adult use marijuana in Montana is shown in the graph.
Projected Marijuana Tax Revenue
Year 1: $100 million in sales~ tax of 15%= $15 million
Year 2: $120 million in sales~ tax of 15%= $18 million
Year 3: $140 million in sales~ tax of 15%= $21 million
Year 4: $150 million in sales~ tax of 15%= $22.5 million
Year 5: $160 million in sales~ tax of 15%= $24 million
Total: $100.5 million
These dollars can go towards vital programs and help fill the holes in Montana’s budget left by declining natural resource revenue. Healthcare, education, and infrastructure programs will all see the benefit of these dollars that can be a stable and vital revenue source for Montana.