Big pot of money waiting if CT legalizes marijuana, analysts say
Connecticut could bring in $45.4 million to $104.6 million a year in revenue if the legislature legalizes marijuana in the same way Massachusetts or Colorado have, Connecticut’s nonpartisan fiscal experts say.
The estimates, by the legislature’s Office of Fiscal Analysis, were for the second full fiscal year after legalization of the drug and varied depending on which state’s model for taxes and licensing fees was followed.
If the legislature allowed municipalities to also apply a 2 percent sales tax to marijuana, cities and towns could collectively bring in $9 million by the second full year of legalization, OFA estimated.
The revenue would be smaller in the first full year of legalization, between $30 million and $63.9 million for the state and $5.6 million for municipalities. The growth from year to year reflects that experienced in Colorado since legalization in 2014.
“To the extent that any enacted policy varies in tax rates and fees from the Massachusetts or Colorado policies, there could be a potentially significant difference in actual revenue collected,” OFA said.
OFA also estimated that regulatory costs would be about 14 percent of total tax revenues each year.
The revenue projection, posted on OFA’s website Monday, was developed in response to a request from an unnamed legislator and could heighten debate at the State Capitol about whether to legalize marijuana. The state is grappling with large budget deficits projected for each of the next two fiscal years.
One Republican and 20 Democratic legislators have proposed or sponsored bills to legalize marijuana. The Democrats include Senate President Pro Tem Martin Looney of New Haven. The Republican is Rep. Melissa Ziobron, of East Haddam, the ranking minority House member of the legislature’s budget writing committee.
Gov. Dannel P. Malloy told reporters in December that it would be a mistake for Connecticut to legalize marijuana, saying the state already had gone as far as he was comfortable with by approving medical use of the drug and decriminalizing possession of small quantities.
“I’ve done my part – with medical and decriminalization,” he told reporters. “I think legalizing it encourages it. It is not my priority.”
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