HARTFORD, Conn. (Hartford Business Journal) — Connecticut could collect nearly $1 billion in tax revenue within five years if the state legalizes recreational marijuana, a study by UConn’s Connecticut Center for Economic Analysis found.
The study found aggregate new tax revenues from legalized recreational marijuana over five years range from $784 million to $952 million. It also found the tax revenue could grow the state’s GDP by $1.7 billion by year five of legalization.
Economist Fred Carstensen, who authored the report, said legalization will benefit Connecticut’s economy at a time in which it needs stimulation.
Some lawmakers recently told HBJ that the COVID-19 induced recession, which has left the state with a multibillion-dollar deficit, could spur lawmakers to push for legalization of recreational marijuana and sportsbetting next year.
“No matter which tax regime the state chooses and no matter how it spends the new revenues, legalization will generate significant job creation, strong growth in GDP and hundreds of millions in new tax revenues,” Carstensen wrote. “In the face of the challenge of recovering from the COVID-19 pandemic, legalization offers a path to strong recovery.
The Marijuana Policy Project, which advocates for the legalization of marijuana, funded the $15,000 study, according to the Hartford Courant.
In addition to added tax revenue, the study found legalization could add more than 16,000 jobs to Connecticut’s economy in five years, with new jobs in the marijuana industry and its supply chain.
Neighboring Massachusetts — where recreational dispensaries began opening in 2018, two years after the state voted for legalization — collected $122 million in tax revenue in the first two fiscal years since dispensaries came online, the Boston Business Journal reported.
The push for legalized recreational marijuana in Connecticut is currently in legislative Limbo. The General Assembly cut short its legislative session this year due to the pandemic. The 2021 session begins in January.
A Hartford Courant/Sacred Heart University poll last year found a majority of Connecticut residents support legalization.
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