Legalizing Marijuana in Vermont

A Spectrum of Economic Possibilities
PRS Briefs
PRS Policy Brief 1516-06
Thursday, March 10, 2016

Marijuana legalization is a prominent matter in politics today. While 23 states have legalized use of the entire plant for medicinal marijuana, only four (and Washington, D.C.) have legalized the use of recreational marijuana for people ages 21 and older. This report contextualizes the financial implications of recreational marijuana legalization by highlighting possible tax plans. It compares tax plans in Alaska, Colorado, Oregon, and Washington, but focuses on Colorado and Washington since their markets are already open. This report presents legislators with considerations for crafting an optimal tax plan: costs and ease of tax base implementation; size of the recreational market; projected tax revenue for Vermont; tax collection and allocation mechanisms; and additional financial implications including black market activity and law enforcement costs.