Legal Marijuana in Arizona Would Generate $72M Yearly in Tax Revenue, New Report Says

Previous marijuana tax-revenue estimates were far too low, states a new report by the nonpartisan Grand Canyon Institute.

Arizona would raise about $72 million in revenue annually beginning in 2019 if voters make recreational marijuana legal in Arizona with an anticipated ballot initiative in 2016, says the report, published on the group's website.

Backers of the Campaign to Regulate Marijuana Like Alcohol announced August 19 that their planned ballot measure would raise at least $40 million a year for Arizona schools. The campaign, sponsored in part by the Marijuana Policy Project, claims to have gathered about 65,000 signatures already toward a citizens' initiative expected to appear on the ballot in November 2016.

The institute "finds that the revenue projections were conservative as proponents claimed," the GCI report states.

If the program were in effect now, sales of marijuana products would produce about $64 million in revenue annually, it says.


"If the initiative were to make the ballot and be passed by voters," the report goes on, "the GCI expects 2019 to be the first year with a full rollout of retailers and at that point, due to inflation and population growth, the expected totals would be $72 million: with almost $29 million each to K-12 education and helping fund all-day Kindergarten, plus $14 million to the Dept. of Health Services."

The report begins by stating that the GCI, which has a 12-member board of directors made up of local leaders on both sides of the political aisle, neither supports nor opposes marijuana legalization. 

"Our estimate was done conservatively so, if anything, it understates [total] revenue a bit — enough to give some wiggle room for administrative costs," Dave Wells, GCI research director and author of the report, tells New Times. 

The Campaign to Regulate Marijuana Like Alcohol's proposal would create a Department of Marijuana Licenses and Control to oversee commercial marijuana operations, and the department would be financed through a number of fees called for in the proposal, Wells says.

In December, New Times revealed that the state Joint Legislative Budget Committee had prepared a report showing that a Democratic lawmaker's proposed initiative to legalize marijuana in Arizona probably would raise $48 million.

The GCI report is more in depth, looking at inflation, population growth, tourism, and other factors.