Tax expert says there could be significant revenues in cannabis legalization, some lawmakers still skeptical
Comments and questions raised on Tuesday during an interim legislative tax policy committee point towards lengthy debates on recreational cannabis legalization in the upcoming legislative session in January.
Richard Anklam, the president and executive director of the New Mexico Tax Research Institute, told lawmakers that states that were early in legalizing recreational-use cannabis like Colorado, Washington, Oregon and California have seen significant tax revenue increases in the past several years. Anklam, using a study from the Tax Foundation, a national think tank, said New Mexico could see roughly $70 million in excise taxes, before factoring in gross receipts taxes, if the state legalizes cannabis for recreational use.
While not as common, Anklam said some states who have recently legalized recreational-use cannabis have developed tax models based on potency instead of by volume of what is sold. He said, the potential increase in tax revenue may not become the state’s saving grace, but that it would make a significant impact.
“What’s the marijuana market worth? It’s worth a lot,” Anklam said. “Most states can’t fund highly significant portions of their government with it, but every little bit helps.”
Duke Rodriguez, the president and CEO of Ultra Health, a New Mexico medical cannabis production company, told lawmakers that despite the large amounts of possible tax money going to the state, current restrictions on cannabis production would not be conducive to a cannabis boom.
Rodriguez has long been a vocal critic of the state’s Department of Health’s restrictions on how many plants producers can grow.