The coronavirus could force more states to legalize cannabis

451 0

As states suffer devastating economic losses, they’re going to turn to alternative sources for revenue

The country is starting to feel more intensely the consequences of the financial havoc created by the outbreak of COVID-19. There are government bodies already experiencing shortfalls for the following months, and, despite the approval in the US of a $2-trillion stimulus package, the economic impact is going to felt for at least another 18 months. Following up the crisis period, many governments will need to come up with new proposals to help each economy to reactivate and recover after the shutdown period. According to some business analysts from DataTrek Research, this pandemic could potentially accelerate the state’s efforts to legalize cannabis in an attempt to obtain more funds for the state’s budget.

“There’s a simple and effective solution for states and cities to help cover their huge budget shortfalls after the COVID-19 pandemic subsides legalize recreational sales of marijuana.” — Jessica Rabe, co-founder of DataTrek Research, in a written statement. “We’ve been thinking a lot about how life will change post-virus, and one big difference will be that state and local governments are going to encounter large unexpected tax receipt shortages,” she added. “That’s particularly true when it comes to sales and income taxes amid stressed consumer balance sheets and massive layoffs. And unlike the Federal government, states can’t print unlimited amounts of money.”

According to Rabe, the traditional revenue-boosting strategies, such as sales or real state taxes, might not be enough to recover the economy, but a new taxed and regulated cannabis market might reinforce state income but without affecting taxpayers. New York, the most affected state in the country, is projecting a revenue drop between $4 and $7 billion due to the coronavirus outbreak. Based on experts’ opinion and being more on the conservative side, a legal cannabis market in New York could bring over $1 billion in annual tax revenue to the state.