Florida economists predict pot would bring in ‘at least’ $196 million in taxes

One of the arguments supporters of the proposed state constitutional amendment legalizing the recreational adult use of cannabis in Florida tout is an increase in revenues to the state.

The nonpartisan Florida Financial Impact Estimating Conference said last July that, based on other states’ experience, if Amendment 3 is passes this fall expected retail sales of non-medical marijuana in Florida would generate at least $195.6 million annually in state and local taxes once the retail market is fully operational. It could go as high as $431 million.

With that as the backdrop, Smart and Safe Florida, the advocacy group for Amendment 3, held a public discussion in Tampa last month with sitting and former elected officials and other stakeholders about how to use that money for public benefit if the measure gets the 60% approval required to become law in November.

“We have so many needs across so many different categories, that to me anything that you can help may free up dollars for other things as well,” said Hillsborough County Commissioner Harry Cohen.

“We need a new criminal courthouse in Hillsborough County. We need fire stations and roads and sidewalks, and clearly schools have tremendous obligations going forward. We have wastewater and stormwater projects in the hundreds of millions of dollars, so anything that can help relieve some of this is beneficial, and this is money that is slipping away to the black market. It’s not that the money’s not out there, it’s just not being able captured legally by us and put to good use.”

But former St. Petersburg Mayor Rick Kriseman, who served six years as Democrat in the Florida House, said he thinks it unlikely the GOP-controlled Legislature would allocate those funds to local government.

“Certainly, when I was there, I would have loved to have seen that happen, but my expectation is that it’s probably not returning,” he said — adding that with collections from gas taxes being reduced in recent years (and with the expansion of electric vehicles ), he personally would like to see it invested in agencies like the Florida Department of Transportation for mass transit and roadway projects.

Sean Shaw served as a Democrat in the Florida House for one term before he ran as the Democratic nominee for attorney general in 2018. He’s now a candidate for the Hillsborough County Commission. Like several panelists, he was “agnostic” about where the revenues should go, “other than not to the general fund.”

“I would want it dedicated for this, this, this, or this, and not into the giant state budget where some things might happen,” he said.

Darryl Jones, a member of the Leon County School Board, noted that Florida Lottery funds were supposed to be distributed to K-12 public schools when that issue came before the voters in 1986. “There were promises made about how that money would go to education. Promises that were not quite entirely fulfilled, so to have this conversation on the front end of the inevitability of this, I think, is important,” he said.

Lottery money does go to education, but perhaps not nearly as much as people anticipated. According to the Florida Lottery , approximately 25 cents of every dollar spent on a ticket goes into the Educational Enhancement Trust Fund, managed by the Florida Department of Education. Each year that money is distributed between public schools, Florida colleges and universities, and the Bright Futures Scholarship.

“Nobody has forgotten the Lottery,” said Shaw. “No one has forgotten the promise made and the promise that was not fulfilled. And we don’t want that to happen again. I think that’s really important for the Legislature to hear that on the front end.”

Jake Hoffman, executive director of the Tampa Bay Young Republicans, said, “Everybody is going to have their hands out asking for that money.” His focus was on how to get more of it back into “the regular taxpayer’s pocket.”

“And if we’re able to do this in a way that offsets property taxes and their insurance situation — things that are affecting our average Floridian — that’s what I want to see happen,” Hoffman added.

Other states

According to a December 2023 report from the Tax Foundation , 21 states tax recreational cannabis. The Phoenix looked at how three of them distribute the tax proceeds:

In Arizona, which started its recreational cannabis program in 2021, one third of those revenues go to community college districts; 31% to public safety, including police and fire departments; 25% goes to the highway user revenue fund, and 10% to the justice reinvestment fund, which is dedicated to providing public health services, counseling, job training, and other social services for communities “that have been adversely affected and disproportionately impacted by marijuana arrests and criminalization,” according to the Arizona Mirror .

In Oregon , 40% of cannabis taxes go to a state school fund; 20% goes to the Oregon Health Authority for mental health treatment or for alcohol and drug abuse prevention, early intervention, and treatment; 15% goes to the state police; 10% to cities; 10% to counties; and 5% back to the Oregon Health Authority for a separate program offering alcohol and drug abuse prevention, early intervention, and treatment services.

And in Montana , after $6 million is distributed annually to an agency dealing with ending addiction through recovery and treatment programs, 20% of adult-use and medical marijuana taxes goes to the Department of Fish, Wildlife and Parks to be used solely for wildlife habitat; 4% to the state park account; 4% for trails and recreational facilities; 4% to nongame wildlife; 3% or $200,000 (whichever is less) to veterans and surviving spouses; $150,000 to the board of crime control to fund crisis intervention team training; $300,000 to the Department of Justice for grant funding for purchasing and training drug detection canines and canine handlers; and the rest to the general fund.

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