According to the Ohio Department of Taxation, legalization of marijuana could bring in as much as $300 million in new tax revenue to the state. That figure is based on the assumption that there would be little integration of the wholesale and retail marijuana business. If the Department of Taxation assumes more integration, the revenue estimates drop to $133 million.
However, the tax revenue would be much greater, according to the organization that is attempting to obtain legalization of marijuana in the state. Responsible Ohio claims its analysis of federal usage data indicates legalization would provide $554 million in additional tax revenue to the state.
Many parts of the state and local government in Ohio would likely welcome the additional tax revenue, and much of it is sorely needed. One bridge project that would span the Ohio River has been estimated to almost equal the entire annual budget of the Ohio Department of Transportation. At a time when no other sources of tax revenue are likely to be made available, this revenue could be irresistible.
Sin taxes, on items such as cigarettes and alcohol, are often favored by legislatures, because they can defend their raising taxes by suggesting that they are really just trying to discourage the use harmful products.
In this case, it appears that members of the administration who may be opposed to marijuana legalization are potentially understating the revenue legalization would bring to make the ballot issue appear less attractive to Ohio residents.
Responsible Ohio argues that within five years, marijuana products could produce as much as $2.6 billion in revenue and the entire marijuana-growing business, including support businesses, could add $4.1 billion to Ohio’s economy.
If those numbers prove real, no one will ask them what they are smoking.
Source: bizjournal.com, “Estimates on Ohio taxes from legalizing pot vary widely,” Barrett J. Brunsman, October 6, 2015