Cannabis is legal, now what?
There’s a lot of confusion out there when it comes to the new law and its local implications. As a village business owner and lifelong Southern Tier resident, I’d like to set the record straight because local governments are now working on a deadline. By Dec. 31, 2021, they must decide whether to opt-out of adult-use retail licensing in their jurisdiction. The truth is that the benefits of opting-in far outweigh the costs for the community, its residents, and its businesses. Here’s why.
Tax revenue. The Marijuana Regulation and Taxation Act (MRTA) mandates a 4% local tax on all retail sales, with 75% of that revenue redistributed directly back to the municipality, and 25% to the county in which it was sold. For a statewide market projected at over $3.5 billion, this translates to upwards of $150,000,000 annually in new revenue to opted-in municipalities across the state.
At the micro level, this means that a single retail dispensary with sales of $3,000,000 (a modest estimate, even for rural areas) would generate $120,000 in local tax revenue: $90,000 to the municipality, and $30,000 to the county.
For local governments operating on shoestring budgets, this could materialize as a new snowplow or two, or a small capital improvement project to the local library or Public Park – things that make life in our community better on a daily basis.
And the economic benefits of retail licensing don’t end with taxes. A 2018 study by the International City and County Management Association (ICMA) took an in-depth look at the effect legal cannabis policies had on various local issues. The study found that non-cannabis related local businesses also benefited from the increase in tourism generated by the presence of a retail dispensary, bringing more foot-traffic to their own storefronts.
Furthermore, the perceived costs of legalization just don’t materialize, as misinformation would suggest. ICMA’s report found that increased crime, youth marijuana use, and intoxicated driving were not at all supported by the data. Rather, they were a likely product of long-standing cannabis prohibition and resulting societal stigma.
Lack of information and long-engrained biases should never be the basis for a public policy decision – no matter how big, no matter how small. From the general fund budget right on down to parking policies, local officials ought to the take time to learn the facts and process stakeholder input so that thoughtful and thorough decisions are made. Cannabis policy should be no exception.
Owner, Your Essential Cannabis