Recreational Marijuana legalization would boost Florida's tax revenue by up to $431.3M per year

Recreational Marijuana legalization would boost Florida's tax revenue by up to $431.3M per year

Support for the legalization of recreational marijuana in Florida is gaining steam ahead of potential placement on the state ballot, which experts say could lead to more local and state tax revenue.

The ballot initiative, which would allow for full adult use and possession of cannabis products for those over the age of 21, already has 1.01 million signatures, according to the Florida Department of Elections. That exceeds the 891,523 signatures needed to be included on the ballot for 2024, and currently is under review by the Florida Supreme Court to make sure the language is clear and that it is focused on just one issue.

The legalization of marijuana could create $195.6 million-$431.3 million per year in both local and state sales tax revenue, according to the Florida Financial Impact Estimating Conference's initial estimates based on data from Arizona, California, Colorado, Massachusetts, Michigan, Nevada, Oregon and Washington.

Medical marijuana is tax-exempt, but recreational cannabis would be taxed.

"More than half of the reviewed states have a separate excise tax in addition to a sales tax on the sale of non-medical marijuana," the Florida Financial Impact Estimating Conference wrote. "The creation of such an excise tax in Florida would require legislative action. Whether the Legislature would take such action is unknown and therefore was not addressed in these estimates."

The state projected its costs to oversee the administration of recreational marijuana to be roughly $9 million in one-time startup costs and $11.4 million annually. The conference projects that 82.7% of users would be Florida residents and tourists coming from the black-market use, with an additional 14.8% coming from the existing folks in the medical marijuana market that would be under a new regulatory structure. The remaining 2.5% includes new tourists, increased usage from current users and new use from those returning.

Tallahassee-based Trulieve Cannabis Corp. — the largest medical marijuana company in the state and the backer of the Smart & Safe Florida campaign — supports legalizing recreational use, which, if allowed to go on the ballot, it would need 60% of voters to approve it.

"We believe the language, as written, comports with the single subject and clarity requirements under Florida law and look forward to a positive ruling from the court," Trulieve CEO Kim Rivers said in a prepared statement.

However, Florida Attorney General Ashley Moody opposes the legalization of recreational marijuana, saying it would remain illegal under federal law, according to YahooNews, while Gov. Ron DeSantis in the past said he opposes it due to its smell, according to Business Insider.

Currently, 23 states have legalized recreational use of marijuana, with Minnesota being the latest.

Meanwhile, cannabis industry jobs platform Vangst in its 2023 jobs report found Florida has the fourth-most cannabis jobs among all legal states at 29,011 as of February, and had the largest amount among all medical-only use states. Vangst reported that much of the growth in the industry is happening on a state-by-state basis.

"Among medical-only states, Florida continued its double-digit growth, adding an astonishing 324,400 medical marijuana patients in 2022 — bringing the state’s registered total to 781,000 [as of February 2023]," according to the report. "That’s more than the entire population of North Dakota. Sales revenue in Florida increased 23% to $1.8 billion, leading to the creation of more than 3,000 new jobs."

Florida's growth is happening as the country lost jobs in legal cannabis. As of February, there are 417,493 full-time equivalent jobs supported by legal cannabis in the U.S, down 2% from 428,059 in 2022.

The Florida Department of Health Office of Medical Marijuana Use oversees the approval of the dispensaries tied to the state's medical cannabis program. As of June 30, the state has more than 579 approved dispensaries, up from 442 about a year ago. Central Florida has 99 approved dispensaries.

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Region: Florida

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