Marijuana taxes are taboo words among recreational cannabis users in the US
While the American citizens understand that they have to pay taxes on food, cars, clothing and everything else, they feel rejection to pay taxes on marijuana, especially recreational. It is important to understand that medical marijuana users pay less marijuana taxes than recreational marijuana consumers, and even in some states they do not pay taxes.
As more states legalize cannabis in the US and impose taxes, many recreational marijuana users who reject to pay taxes cross over to other states to avoid them. Many consumers accumulate recreational marijuana when they know that taxes on it will rise. If state governments do not anticipate this behavior, they will lose a lot of incomes and even encourage greater consumption of marijuana from the black market.
Interestingly, the states do not study the impact of the cannabis taxes that so much rejection produces on the American consumer. A team of public policy students has studied data obtained from Oregon marijuana users in relation to taxes, because they wanted to know the economic consequences of recreational cannabis taxes in an industry of billions of dollars.
At this time, states depend more than ever on this new source of income, which is the taxes on sales of recreational marijuana to pay for education, health, and more. Therefore, it is vitally important that states understand the rejection to pay taxes on sales of recreational and medical marijuana in consumers to adjust them according to their convenience.
The states that have legalized recreational marijuana have created a sales tax, which has generated great economic benefits. For example, in January 4, 2016, Oregon officials applied a 25% tax on the sale of recreational marijuana, which generated $ 60.2 million in tax revenue that year.
A very frequent behavior that recreational cannabis users have is buying and storing large amounts of weed when they expect the state to increase taxes on recreational marijuana. The same thing happens when citizens know that the price of vehicle fuel will increase. The day before everyone filled the tank of the car. This behavior means a decrease in the income generated by cannabis taxes, at least until consumers spend the excess they had bought.
Cannabis purchases in another state reflect the rejection of the average American to pay taxes on the sale of recreational marijuana. For this reason they cross the borders of the state to buy weed in another state in which the taxes are lower and there are even no taxes in the case of medical marijuana. This happens for example in Oregon, a state in which several cities are very close to other states where cannabis is legal but cannabis taxes are lower.
When medical marijuana was legalized, it was initially tax exempt. Interestingly, many recreational marijuana users became qualified patients for medical marijuana use, as we can deduce from the increase in medical marijuana applications in Oregon. In addition, medical marijuana patients can also purchase duty-free marijuana for friends and family, further reducing the revenue collected.
The figures do not lie. Medical marijuana licenses reached nearly 3400 in Oregon in June 2015. But when later recreational marijuana was legalized for adults, medical marijuana licenses fell to 1250. And when later, in January 2016, a tax 25% tax was imposed on recreational marijuana, medical marijuana license applications increased again to more than 2000 because citizens refused to pay taxes for recreational marijuana.
The question is to know what states can do to avoid this problem. A good solution is to coordinate cannabis taxes in all states. This would prevent consumers from moving to other states to make their purchases. The study advises that health officials work with medical marijuana consumers who do not pay the weed taxes paid by recreational consumers. A good solution would be for dispensaries to be connected electronically and for purchase cards to be readable through a computer so they can track marijuana sales. This practice could help reduce the evasion of money that is currently occurring as a result of the refusal to pay marijuana taxes from the consumer.
Of course, it would be advisable to match the economic value of recreational cannabis taxes in all states since the differences are important with which interstate travel is favored to avoid the tax burden. Meanwhile, marijuana taxes are still hated words among cannabis users.