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Washington State Marijuana Law Could Bring In Major Tax Revenue


Washington state’s initiative to legalize marijuana, which will be on the November ballot, could raise up to $1.9 billion in new tax revenue over five years, if the federal government allows it.

The state Office of Financial Management noted that if the law passes and the federal government enforces criminal laws against marijuana, the state might not see any tax revenue from the measure.

There is broad uncertainty about whether the federal government would intervene if Washington passes the nation’s first regulated market for recreational marijuana, according to The Seattle Times.

The $1.9 billion estimate assumes 363,000 customers would consume 187,000 pounds of marijuana in state-licensed retail stores. Initiative 502, or I-502, would earmark $227 million of new marijuana taxes each year for the state’s basic health plan. An additional $113 million would go toward drug research, prevention and treatment. The costs to administer the program are estimated at $16 million annually.

When California voters considered a measure to legalize marijuana in 2010, U.S. Attorney Eric Holder sent a letter that promised to “vigorously enforce the CSA (Controlled Substances Act) against those individuals and organizations that possess, manufacture and distribute marijuana for recreational use, even if such activities are permitted under state law,” the article notes.

Alison Holcomb, who is managing the I-502 campaign, said the federal government’s response may depend on the vote’s margin of victory. She said the federal government usually intervenes in state medical marijuana operations when they appear to be abusing state law.

The measure would also establish a new driving under the influence threshold for marijuana, which the budget office estimated would raise almost $4 million in fees from drivers who are charged under the provision.

1 Response to this article

  1. maxwood / August 13, 2012 at 8:21 pm

    1. The figures given above, if correct, suggest a use of about 1.648 ounces per customer per year and a tax intake of $1047 per customer per year– $635 per ounce! Who is going to prefer that to the present black market price of $200 an ounce? 2. Even assuming that the price of cannabis (before taxes) will plummet from the present $200 and up, this expropriatory tax, compared to that levied on deadly addictive commercial tobacco cigarettes (under $10/oz.), constitutes a means for driving users, especially youngsters who may be smoking for status or adventure, toward the latter (with heavy health care costs to the taxpayer down the road).

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