Here's what might happen to marijuana prices if it were legalized across the US
Over the last two decades marijuana has practically been an unstoppable force.
Since 1995, 23 states have legalized marijuana for medicinal purposes, while four states (along with Washington D.C.) have legalized all aspects of marijuana, including its recreational use for adults. Even in states where marijuana failed to gain approval initially, such as Oregon, the proverbial scales were tipped in favor of supporters just a few short years later.
Even Congress is getting in on the act. In March, three U.S. Senators introduced the CARERS Act, which is a bill aimed at decriminalizing medical marijuana. The CARERS Act would make it easier for banks to make loans to legal medical marijuana businesses, would remove some of the barriers associated with medical marijuana research, and most importantly would reschedule marijuana from a schedule 1, or illicit drug, to a schedule 2 drug, signifying that it does have medical benefits, even if it is prone to abuse.
But, have you ever really thought about the hypothetical economic implications of what would happen if marijuana was made legal nationwide?
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Marijuana industry could grow fast with tax bill
As marijuana businesses expand in Washington State, a bill being debated in Olympia could prompt the industry to grow even more.
Producers, processors and retail shop owners are closely watching HB 2136, which would rework some of the current regulations and change the tax structure. Some marijuana businesses say it's nearly impossible to make any money under the current tax structure.
"We've learned a lot since I-502 passed," says Rep. Reuven Carlyle (D-Seattle), the bill's primary sponsor. "This is an update, and a modernization of the current initiative."
Right now, marijuana laws apply a 25 percent excise tax on each level of the system: producer to a processor, processor to a retailer, and retailer to the customer. In addition, B&O taxes on the production and local retail sales taxes apply.
For those who operate as a producer and a processor, a common business model, they're hit with three taxes.
HB 2136 would collapse the tax burden, into one, 37 percent excise tax.
Large scale producer/processors, like OMG Sykes in Snohomish County, say simplifying the tax structure will allow businesses to more easily operate, and make money.
"With where the prices are in the market, it's very tough to compete," said John Knutsen, co-owner of OMG Sykes, one of the largest operations in the state.
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