CINCINNATI — Beginning Tuesday, Ohio is expected to see a lot more green from recreational marijuana sales.
"We estimated that after four years of existence, so once the market actually matures, it should be bringing somewhere between, you know, $217 million to about $400 million a year into the state budget,” said Jana Hrdinova, administration director for the Drug Enforcement & Policy Center at Ohio State University Moritz College of Law.
Hrdinova says that local communities with dispensaries will also receive thousands, if not millions, in tax revenue.
"So if the local board of commissioners decides that they want to spend the money on policing or schools, that will be an approved expense,” Hrdinova said. “I believe that their local communities will be given a lot of freedom in terms of how the money is spent once it comes to them from the state."
The local money Hrdinova is referring to will come from the excise tax on marijuana. A 10% tax added on to the state’s 5.75% tax.
With both taxes, adult-use marijuana consumers can expect to pay 15.75% when they go to the dispensary, plus the local tax of the city, township or county they are in. That can range from zero to 2.25%, according to Hrdinova.
The 10% excise tax will be split up among the Cannabis Social Equity and Job Fund (receiving 36%), the Department of Mental Health and Addiction Services (25%), the Division of Cannabis Control and Department of Taxation (3%) and local communities with dispensaries across the state (36%).
Karen O'Keefe with the Marijuana Policy Project (MPP) said the additional marijuana sales tax has helped communities pay for major needed improvements.
"I live in Michigan, I saw one little tiny town where I want to say 15,000 people were able to buy a brand new $800,000 fire engine that they desperately needed with cannabis tax revenue,” said O'Keefe, the director of state policies with MPP.
And O'Keefe says it's not just tax revenue, the MPP expects over the next 5 years the state will see billions in economic activity, more jobs and more small businesses.
"I'm kind of gonna say that for every dollar in the cannabis industry, you expect about $2.50 additional in economic activity as that money stays locally. So we can increase that $3.4 billion in sales over time, which would be about $10 billion total in economic activity in addition to that roughly 35,000 jobs that we anticipate,” O'Keefe said.
But a Federal Reserve Bank of Kansas City study found that while tax revenue increased when marijuana became widely available, revenue from alcohol and tobacco taxes decreased in states where recreational marijuana was legalized.
The study also found when adult-use marijuana was legalized in Colorado and Washington, state income, population and house prices all increased. They include that while economic benefits to adult-use marijuana sales are modest, they are also widely distributed.
For a list of medical dispensaries near you that will be selling recreational marijuana starting Tuesday, click here.
