Potential Tax Revenue from a Regulated Marijuana Market A Meaningful Revenue Source |
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| Authors: | Michael R Caputo Brian J Ostrom |
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| Institution: | Michael R. Caputo, Ph.D., is associate professor of agricultural economics at the University of California, Davis, CA 95616, and Brian J. Ostrom, Ph.D., is senior research associate at the National Center for State Courts, Williamsburg, VA 23185 |
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| Abstract: | A bstract . Dissatisfaction with current drug policy measures has led to a push for the regulation of drugs , especially marijuana . On the premise that such regulation is a real possibility, estimates of potential tax revenue from a regulation scheme and critical comments on other estimates of the size of the marijuana market are presented. For 1991, potential tax revenue is estimated to range from 2.55 to 9.09 billion dollars. The uncertainty surrounding the price elasticity of demand for marijuana, home cultivation of marijuana by individual users, and the extent to which purchases may still be made from the black market are discussed, as are their implications for potential tax revenue. |
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