Report: Cannabis Industry Could Generate $132 Billion In Taxes, Create 1.1 Million Jobs By 2025

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(image via THCUniversity.org)

New Frontier Data, the authority in data, analytics, and business intelligence for the cannabis industry, released a new study, Cannabis In the U.S. Economy: Jobs, Growth and Tax Revenue, examining what full adult use legalization of cannabis could generate in terms of federal tax revenue and jobs for the United States economy. New Frontier Data forecasts that cannabis has the potential to create cumulatively $131.8 billion in federal tax revenue and 1.1 million new jobs by 2025.

“The three most common business taxes that any standard business pays to the federal government are federal business taxes, payroll taxes and sales taxes. If cannabis businesses were legalized tomorrow and taxed as normal businesses with a standard 35% tax rate, cannabis businesses would infuse the U.S. economy with an additional $12.6 billion this year,” said New Frontier Data CEO Giadha Aguirre De Carcer.

This report examines three aspects of what full legalization would look like in contrast to thecurrent, state-by-state patchwork of legalized environments, and the anticipated impacts which full nationwide legalization would hold for the U.S. Treasury. These three aspects include federal business taxes on cannabis businesses, federal payroll withholdings, and revenue generated from a federal cannabis sales tax of 15%. A comparison is presented between the current state of legalization and a theoretical model over the same period, with the end result of such comparisons showing economic net benefit both to the U.S., and in terms of increased jobs creation.

  • If full legalization occurred in all 50 states today, there would be an excess of 782,000 jobs, and would increase to 1.1 million jobs by 2025.
  • Full legalization would result in more legal businesses participating in the market, more consumers participating in the legal market, and more employees on official payrolls, resulting in $4 billion in payroll taxes. By 2025, payroll deductions would increase to $5.9 billion.
  • Assuming a sales tax at the federal level was implemented at 15%, the total tax revenues from 2017-2025 would theoretically be $51.7 billion. This amount of revenue would be entirely new revenue to the U.S. Treasury, as there are currently no federal sales or excise taxes.
  • By combining the business tax revenues, the payroll withholdings based on the theoretical employment required to support the industry, and the 15% retail sales tax, one can calculate the total federal tax revenue potential of legalization: The combined total is estimated to be $131.8 billion.
  • The difference between the current structure and the theoretical model is a $76.8 billion increase in federal tax revenues.

About New Frontier Data:
New Frontier Data provides objective, rigorous and comprehensive analysis and reporting for the nascent and underserved cannabis industry worldwide. New Frontier Data’s analytics and reports have been cited in over 65 countries around the world to inform industry leaders. New Frontier Data, the premiere and only Big Data shop in the sector looks beyond the plant cultivation and distribution, to raise the industry bar and improve visibility into what will inevitably soon be a mature and more complex global market. Founded in 2014, New Frontier Data is headquartered in Washington, D.C. and has additional offices in Denver, Colorado.

New Frontier Data does not take a position on the merits of cannabis legalization. Rather, its mission and mandate are to inform cannabis-related policy and business decisions through rigorous, issue-neutral and comprehensive analysis of the legal cannabis industry. For more information about New Frontier Data please visit: www.newfrontierdata.com.

Source: Globe Newswire

Johnny Green
About Johnny Green 2191 Articles
Johnny Green is a cannabis activist from Oregon. Johnny has a bachelor's degree in public policy, and believes that the message should always be more important than the messenger. #LegalizeIt #FreeThePlant