Policy Documents

Will Legal Pot Cost More Than Black-Market Pot?

Jacob Sullum –
October 21, 2013

In this general view of the power of taxation as it relates to the marijuana industry, the author argues that lower taxes may actually reap more receipts, than higher taxes on the product:

Washington and Colorado legislators will have the power to adjust tax rates. But they may be tempted to keep taxes high in the hope of generating more revenue, even when reducing rates might actually boost revenue by allowing licensed sellers to attract more business. The backers of hefty marijuana taxes are putting a lot of trust in legislators’ ability to anticipate unintended consequences and learn from experience—skills that do not come naturally to politicians.