If a pair of new government forecasts prove true, Washington and Colorado would see more than $800 million in extra revenue over the next few years thanks to marijuana sales. At the least.
The estimates, both released in recent days, differ greatly in what they predict and over what time period. But together they show that the plant, now legal to purchase in both states, could generate at least $811.2 million for the trailblazing states before 2020. Washington can expect $637 million by 2019, while Colorado can expect $174.5 million through the fiscal year that ends in 2017, according to state estimates.
Such estimates are, of course, difficult to make as there is no precedence for what is being forecast: Marijuana for recreational use has never before been sold legally.
The Washington’s forecast, released last Thursday by the state’s Economic and Revenue Forecast Council, was the state’s first prediction to be based on actual sales, which began in July. In Colorado, sales began in January, so the state’s Legislative Council had slightly more data to work with for its latest estimate, released Tuesday.
The new Washington forecast through 2019 is a slight upward revision from the February and June forecasts, thanks in part to sales beginning sooner than forecasters predicted, raising near-term estimates. Just under 30 percent of the total expected revenues will go to the state’s general fund, while the remaining portion has been been flagged for specific uses by law. As a result, lawmakers will have an extra $186 million to manage as they please.
Colorado’s forecast was calculated differently. Unlike Washington’s forecast, state economists in Colorado expect sales to remain roughly flat from year to year, steadily yielding just under $50 million annually. The authors were careful to note that their estimate is only based on “a few months of data for a maturing market” and conditions are still changing.
“The marijuana market is maturing which will impact the price and consumption of regulated marijuana,” they wrote. “Specifically, more local jurisdictions have allowed adult-use marijuana stores and adult-use marijuana businesses are no longer required to be vertically integrated.”
There were few changes made between the June and September reports, they wrote, because incoming taxes were “generally consistent” between the two forecasts. As in Washington, some of the revenue in Colorado will be flagged for particular uses, such as education funding and addiction programs.