Marijuana Revenue Not Burning As Brightly As Expected (In Rhode Island, At Least)

The ongoing debate as to whether or not to legalize marijuana across the United States has been broached from many angles. However, one argument has become the mantra of states wanting to legalize pot — money.

The revenue from legal marijuana, they argue, will give state governments more freedom and allow new projects to improve communities and make voters happy. However, if the marijuana revenue reports from Rhode Island are anything to go by, that argument may have lost some of its luster.

Related Link: Is Ohio The Next Home For Legal Weed?

Not A Cash Cow

Despite the fact that Rhode Island has been collecting a 7 percent sales tax and a 4 percent surcharge on medical marijuana sales, finance officials say revenue from sales of the drug are only about half of what was projected when it was made legal. The state's Department of Revenue initially forecast that the sales tax would generate around $2 million in revenue and that the surcharge would bring in another $1.1 million by 2016. However, revised predictions show that Rhode Island is only set to bring in around $1 million for sales taxes and $675,000 for the surcharge.

What Happened?

Many say the disparity between what was expected and what came in is due to an unforeseen industry of caregivers who are authorized to grow and sell the drug tax-free. With dispensaries bogged down by taxes, caregivers have emerged as a competitive force which has cut down on state revenue.