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On Tuesday, four states’ voters approved measures to tax and legalize recreational marijuana for adults.
Arizona, Montana and New Jersey joined the 11 state that have legalized recreational marijuana.
These other states include Alaska, California and Colorado as well as Illinois, Maine, Massachusetts (Michigan), Nevada, Oregon, Vermont, Washington, and Washington.
Washington, D.C., allows adults aged 21 or over to possess up 2 ounces of marijuana. It also allows the transfer of up 1 ounce to another adult. However, you can still get arrested for selling it.
Also, voters approved measures to legalize medicinal marijuana in South Dakota and Mississippi.
Steve Hawkins, executive Director of the Marijuana Policy Project, stated that New Jersey legalized cannabis, while deep-red South Dakota, and Montana did so. It shows that Americans support legalization .”
of cannabis, regardless of party affiliations or political ideologies.
Additionally, legal pot can be used to help states increase their revenue during the current economic downturn. Experts in policy said that it all comes down to how they approach tax.
Fine-tuning taxes
The amount of pot sales tax a state will receive will depend on the structure of their tax and how each state approaches licensing and regulation.
Many jurisdictions will add an excise tax to the sale of marijuana, in addition to a general sales tax.
Ed Zollars, CPA, partner at Thomas Zollars & Lynch Phoenix and instructor at Kaplan Financial Education, said that if you raise the rates too much, everyone will go to the black market.
A tax that is based on the cost of marijuana products, rather than a tax based on weight or consumption, could result in volatile revenues, particularly as pot becomes more readily available and prices drop, according to Ulrik Boesen (senior policy analyst at Tax Foundation).
He stated that “This is why with excise tax, we always say, if you tax according to quantity, you’re more likely to have stable revenue.” “Even though price changes are unpredictable, it is possible to predict how many people will buy in terms of their weight .”
Below is a list of recreational pot initiatives that voters approved yesterday.
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