Economists estimate there are 1.8 million Floridians who purchase marijuana illegally on the black market – the economists estimate half of them will switch to legal marijuana.
Tallahassee Democrat
State economists estimate there are 1.8 million Floridians who purchase marijuana illegally on the black market – the economists estimate half of them will switch to legal marijuana.
Economists expect 2% of Florida tourists, or about 2.4 million people, would buy 1.6 grams of marijuana, at the cost of $10, during a Florida vacation.
Economists are adding up the additional sales tax revenue the state will reap and how much it will spend to collect that money if voters were to approve a constitutional amendment legalizing the recreational use of marijuana.
If legal today marijuana sales would generate between $195.6 and $431.3 million annually in local and state sales tax revenue, according to preliminary figures compiled by the Florida Financial Impact Estimating Conference.
The conference, made up of economists from the Florida House, Senate, Governor’s Office, and the Office of Economic & Demographic Research will meet Thursday to finalize their calculations.
Here's What to Know
The Adult Personal Use of Marijuana proposed constitutional amendment would allow those 21 and older to possess up to two and a half ounces of marijuana. Medical Marijuana Treatment Centers would be allowed to sell marijuana to customers who do not have a Florida Medical Marijuana Use Registry card.
While heavily dependent on how the Legislature would decide to tax marijuana products and accessories, the FIEC expects once fully operational a legal marijuana retail market would quickly produce hundreds of millions of dollars in additional revenue for the state.
The Adult Personal Use of Marijuana proposal would do away medical marijuana cards for purchases of products
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What are the costs?
The four economists estimate the required regulatory structure will cost $1.5 million for startup and about $9 million annually to operate.
The Florida Association of Counties said it was unable to determine the financial impact if voters were to approve the amendment – it takes a 60% vote for passage.
The Florida Sheriff’s Association and the Florida Police Chief Association expect a considerable impact on law enforcement if recreational use of marijuana is permitted. In a joint statement they cited an increase in illegal marijuana production in Colorado, and California drivers testing positive for marijuana use.
But the sheriffs and chiefs of police told the FIEC, “it is impossible for us to provide an actual cost.”
Many unknowns
It is difficult to determine whether marijuana legalization is a losing financial proposition for government or a money maker because so much is unknown.
The existing statutory framework for medical marijuana would automatically be repealed six months after implementation of the Adult Use proposal.
Florida Medical Marijuana regulations currently produces more than $120 million annually in tax and licensing collections.
A Flint Michgian customer purchases recreational marijuana
What the Legislature will do, and how business and consumers will respond if the Adult Use proposal becomes law are unclear to analysts, economists, and affected agencies.
Property, gross receipts, and corporate tax collections depend on business decisions.
State and local government determine sales and excise taxes.
Ultimately, the revenue stream depends on consumer demand, and availability – a product of both government and business decisions.
The one assumption state economists accepted is that if recreational marijuana were legal, it would be subjected to a sales tax and there would be a substantial increase in sales.
They arrived at that conclusion after two months of analyzing and discussing reports from state agencies and law enforcement.
They also had analysis of what happened in eight other states that legalized recreational marijuana – Arizona, Colorado, Massachusetts, Michigan, Nevada, Oregon, and Washington.
Four of those states levy an excise tax in addition to a sales tax on the sale of marijuana and accessories – a potential option for Florida.
A bottom line by the numbers
The economists placed a $1.7 billion value on an initial recreational marijuana market in Florida with a customer base made up of about 1.4 million people.
Those individuals are current medical marijuana patients, illegal marijuana customers, and tourists.
Twenty-three states allow adults the personal use of marijuana. Florida may decided to join the group in 2024
Here’s why they think Florida would be a $1.7 billion market.
The Department of Health told the FIEC there are 826,560 Floridians with medical marijuana cards, and the FIEC bets about a third of them will give up their cards and become recreational customers – saving themselves about $200 in annual fees.
Based on federal and academic reports, state economists estimate there are 1.8 million Floridians who purchase marijuana illegally on the black market – the economists estimate half of them will switch to legal marijuana.
And the economists expect 2% of Florida tourists, or about 2.4 million people, would buy 1.6 grams of marijuana, at the cost of $10, during a Florida vacation.
State economists are charged by law with providing a detailed estimate of the financial impact of proposed constitutional amendments to the Secretary of State Office, for public reference, and the Attorney General, the state's top law enforcement officer.
Attorney General Ashley Moody is opposed to the Adult Use proposal and has filed a challenge with the Supreme Court to block it from the 2024 ballot.