With medical marijuana legal in 23 states and Washington DC already and recreational use legal in Colorado and Washington the revenue that could be made from taxation of marijuana is a hotly debated issue each election. Nerdwallet.com recently crunched the numbers and here’s what they found.

How Canada’s MMJ Taxes Relate to the US

Currently medical marijuana is legal in 23 states and Washington DC. Since legalization, these state’s have seen billions of dollars come in taxable revenue. This means state’s that have not yet legalized marijuana stand to make millions or billions of dollars in tax revenue if they were to. Thanks to inspiration from Canada’s Medical Marijuana program states that have already legalized medical marijuana are looking to legalize small amounts for recreational use to capitalize on the tax potential.

According to research from nerdwallet, California would stand to gain the most of any US state at approximately $519,287,052.

 Source: nerdwallet.com

Quick Overview

• California stands to make the most revenue at $519,287,052
• North Dakota stands to make the least revenue at $4,023,544
• The revenue gap between the California and North Dakota is $515,263,508
• The US as a whole stands to raise $3,098,866,907 in tax revenue

Now, Nerd Wallet used the following factors, to determine how much each state stands to make off of taxable marijuana:

1. Variations in excise taxes: Each state will determine its own taxes, but for our calculations, we assumed the same 15% excise tax that Colorado collects across all states.
2. Reduced spending on law enforcement: We didn’t include the money states would save by not having to enforce laws against the use of marijuana. Miron, the Harvard economist, estimates a savings of $7.7 billion annually nationwide on law enforcement.
3. Medical marijuana sales: We didn’t deduct the amount of revenue raised in states that have legalized medical marijuana. The total revenue we calculated for California, for example, includes revenue they already make from medical marijuana sales.
4. Potential market changes: If marijuana becomes legal for wider recreational use, consumption could increase, which would make our current market estimates low.

In the end it all comes down to money and with the amount of money that is on the table ready to be made with medical marijuana or the legalization of marijuana the process of taxing it is here to stay.