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PA’s Auditor General Predicts Legal Pot Would Bring In Over $500 Million a Year

The Auditor General’s special report builds on the momentum of successful decriminalization efforts in Pittsburgh and Philadelphia.

Adam Drury

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PA's Auditor General Predicts Legal Pot Would Bring In Over $500 Million a Year
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On Thursday, Pennsylvania’s Auditor General announced the release of a report titled “Regulating & Taxing Marijuana” that lays out the advantages of establishing a legal, regulated adult-use cannabis market. The attention-grabbing special report provides data detailing the potential revenue and financial benefits legal weed could bring to Pennsylvania.

PA’s Auditor General Eugene DePasquale Is Seeing Green

Naturally, an auditor general would play up the money-making aspects of legalizing marijuana. And the aesthetics of Eugene DePasquale’s 14-page report certainly suggest he’s seeing green.

On page six, a large, green heading reads “$1.66 billion” to indicate the economic boost PA can expect from legal cannabis. DePasquale’s math is simple.

Using survey data from the Substance Abuse Mental Health Services Administration, DePasquale calculated the number of adults who admit to regularly using marijuana in Pennsylvania at just under 800,000 people.

Then, using data from Colorado and Washington, DePasquale estimated Pennsylvania cannabis consumers would spend roughly $2,080 each per year on weed. That adds up to a $1.66 billion industry, should Pennsylvania legalize cannabis for adults.

But that estimate accounts just for sales, and wouldn’t include the economic benefits of job creation, business opportunities, investments and decreased criminal legal system costs.

Furthermore, DePasquale’s report paints an appealing picture of the revenue Pennsylvania could gain from taxing the legal cannabis industry.

The Auditor General envisages a 35-37 percent total tax rate. That includes a 10 percent excise tax for producers, a 19 percent sales/retail excise tax, and a state sales tax of 6 percent. DePasquale also indicated that counties could add local sales taxes of 1 to 2 percent.

Pittsburgh Mayor and Auditor General Team Up To Support Legalizing Weed

Taxing a $1.66 billion industry at 35 percent would give Pennsylvania about $581 million in annual recurring tax revenue. DePasquale’s report explains what that half billion in tax revenue could help fund.

Teaming up with Pittsburgh Mayor Bill Peduto, DePasquale indicated that programs like the Children’s Health Insurance Program (CHIP) would benefit, as well as other programs that serve veterans and young people.

Mayor Peduto referenced the potential for legal cannabis to reduce opioid use and prescriptions. Both the mayor and the auditor general also described how legalizing cannabis would decrease arrests and criminal justice costs.

DePasquale’s report directly points to the success of decriminalization in Philadelphia and Pittsburgh. Philadelphia District Attorney Larry Krasner has spearheaded an effort to reform how the city handles marijuana cases.

Krasner has even directed his office not to bring charges against anyone arrested for possessing marijuana. And in Pittsburgh, possession arrests (for less than one ounce) are down nearly 50 percent from 2016.

Pittsburgh Mayor: “No Doubt” Pennsylvania Will Legalize Cannabis

Pennsylvania Auditor General DePasquale’s report brings to mind the New York Department of Health’s recent report supporting legal cannabis.

For Mayor Peduto, making sure Pennsylvania is a leader and not a follower of the regional trend toward legal weed is paramount.

The Pittsburgh mayor also understands how criminalizing cannabis use can set people back for life. Marijuana convictions make it difficult for people to find housing, loans and jobs, and have other indirect effects.

And that’s why Peduto is in favor of legalizing cannabis for adults in Pennsylvania. He has no doubt legal weed is coming to PA.

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