Why is Legal Weed So Expensive?
Legal weed has huge potential to enhance everyone’s lives with access to high quality, safe, and plentiful bud. Lucky residents of 11 US states and Washington DC are currently enjoying legal highs, but it’s a sticky business with recreational marijuana use remaining illegal federally. So why is it breaking wallets across the country to enjoy the benefits of weed? There are many factors that go into their price.
There are many layers of taxes in most states that have legalized weed. While they vary slightly from state to state, weed generally has substantial excise taxes tacked on to the price. These are taxes that the government puts on specific goods and services like alcohol, tobacco, and gasoline. Some states have reaped the benefits of weed more than others. In 2018, Colorado reported $267 million in marijuana-related tax revenue while Washington state reported $439 million and California reported $354 million. On the other hand, Nevada, and Oregon both reported weed-tax revenue lower than $100 million.
On the surface, it doesn’t seem like there would be a lot of overhead in producing and selling a natural product like weed. Starting up in a brand-new industry is expensive, though. Producers can face startup costs that exceed $1 million. Once they are up and running, rules, and regulations surrounding legalized weed sales changes frequently. Every change means more money needs to be spent by the producers and retailers. These costs are all tacked onto every ounce. The benefits of weed come at a price.
Weed producers and retailers have many hurdles that other mainstream businesses don’t have to tackle. Because weed is illegal federally, many financial institutions and payment processing companies won’t deal with anyone in the cannabis or CBD industry. The few companies that do service weed businesses charge exorbitant fees. Most banks won’t lend to a business that is operating in an industry that is illegal federally. All these extra fees and hurdles make partaking in the benefits of weed even more expensive for you and me.
Benefits of Federal Legalization
The benefits of weed will be more fully realized when it becomes legal federally. A larger market will make funding difficulties, payment processing problems, and specialized equipment less expensive.
Federal legalization will also put more tax money into the federal coffers. Reports show that the federal government could see huge benefits of weed. It is estimated that, if weed were legal, the federal government would see $131 billion in tax revenue between 2017 and 2025.
Government savings go beyond taxes. Pro-legalization groups say that legalizing weed will save federal, state, and local law enforcement agencies a lot of money. The American Civil Liberties Union reports that the federal government alone spends over $3 billion on enforcing marijuana laws. When you take into account the societal costs of criminalized weed, it is staggering. The benefits of weed legalization federally reach far beyond tax revenue.
Though weed is expensive right now in the few states where it is legal, the prices will begin to drop as it becomes legal in more places. The benefits of weed reach far beyond a good high and influence our society in so many ways.