Analysis: Kentucky Could Bank $30 Million on Legal Marijuana
How much money could Kentucky add to its budget if marijuana were legalized in the Commonwealth?
Almost $30 million. $29,883,891, to be exact, according to the folks at Nerd Wallet which created a simple formula to measure the potential revenue in each state.
The method: stats pulled from a substance abuse organization detailed the percentage of marijuana users over 25 (and multiplied that percentage by the state's population over 25) to determine user base, and then Nerd Wallet multiplied the state's percentage of total users over 25 by the total marijauna market estimate (created by a Harvard economist and placed at $14 billion).
The method also involved the state's sales tax (6%) and suggested excise tax (15%).
The analysis determined that Kentucky has a population of 2.9 million aged 25 and older, 3.65% had smoked marijuana in the past month. That's 107,000 people, giving Kentucky 1% of the national marijuana market. The market size is $142 million which taxed would generate the nearly $30 million.
What the Nerd Wallet story leaves out, however, is that Kentucky is pretty well known for its marijuana growth. A 2006 survey showed that the Commonwealth produced more than 6 million plants weighing more than 2.7 million pounds and producing more than $4 billion in revenue, placing it third in the nation behind California and Tennessee, as cited by CannaCentral.