Taxes and Tokes: Taxing America’s Top Cash Crop

By Paul Ausick Updated Jan 13, 10:41AM EST · Published Apr 17, 8:44AM EDT

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Legalizing marijuana for recreational use included as part of supporters’ story the amount of tax money a state could realize from the sale of cannabis and cannabis-related products. And while marijuana taxes have mostly lived up to those predictions, there’s a lot more money on the table.

According to Community Tax, a full-service tax company offering services to U.S. taxpayers, marijuana is the top cash crop in the U.S., hauling in nearly $3.1 billion annually. Worldwide, the cash value of marijuana tops $300 billion, making it the largest cash crop in the world. Only rice exceeds $200 billion in revenues and only wheat and maize (corn) exceed $100 billion.

Community Tax has prepared a handsome graphic of the tax benefits to Colorado, Washington, Oregon, and Alaska, the four states where recreational sales and use of marijuana is legal. Only Colorado and Washington have enough history to demonstrate year-over-year growth, but it is clear that tax revenues are soaring.

[recirclink id=283726]

In the fiscal year ended in June 2015, Colorado collected $77.9 million in retail taxes from marijuana sales. In the following eight months through February of 2016 the state has collected $88.3 million. In Washington, tax collections totaled $64.9 million in fiscal 2015 and have soared to $126.7 million in the first 8 months of the 2016 fiscal year.

Here’s the Community Tax graphic:

Courtesy of: Community Tax

DISCLOSURE:

Customer must fund their Active Invest account with at least $50 within 45 days of opening the account. Receive a minimum of $15. Probability of member receiving $3,000 is a probability of 0.026% If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Percentages for the $3,000 are subject to decrease. See full terms and conditions.

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org). Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation.

Follow 24/7 Wall St. on Google

About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.