What Tax Revenues Should Ohioans Expect If Ohio Legalizes Adult-Use Cannabis?

Ohio State Legal Studies Research Paper No. 791

Drug Enforcement and Policy Center, August 2023

11 Pages Posted: 12 Aug 2023 Last revised: 30 Aug 2023

See all articles by Jana Hrdinova

Jana Hrdinova

Ohio State University (OSU) - Michael E. Moritz College of Law

Dexter Ridgway

Ohio State University (OSU)

Date Written: August 10, 2023

Abstract

Advocates for cannabis reform in Ohio and in other states often stress the tax revenue that can be raised through legalization. If a citizen-initiated statute were to reach the November 2023 ballot, Ohio voters are likely to hear from reform advocates about the potential tax revenue a new cannabis industry could bring to the Buckeye State. The purpose of this policy paper is to provide an updated estimate of potential cannabis tax revenue in Ohio that is informed by tax revenue data and trends from a select group of other adult-use states. Based on our analysis, we are using Michigan FY 2021 data on cannabis tax revenue as our focal point for Ohio cannabis tax revenue estimates given the demographic and tax structure similarities; we are using three different scenarios for rate of diminishing retail sales growth through year five of an operational legal adult-use program; we are using state population figures as our basis for calculating per capita cannabis tax revenue rates; and we are modeling for three different Ohio pricing scenarios. Given these assumptions, the updated potential annual tax revenue from adult-use cannabis in the state of Ohio ranges from $276 million in year five of an operational cannabis market to $403 million in year five of operations.

Keywords: cannabis tax revenue, marijuana tax revenue, adult-use marijuana, recreational marijuana, state revenue estimate, Ohio, Ohio cannabis market

Suggested Citation

Hrdinova, Jana and Ridgway, Dexter, What Tax Revenues Should Ohioans Expect If Ohio Legalizes Adult-Use Cannabis? (August 10, 2023). Ohio State Legal Studies Research Paper No. 791, Drug Enforcement and Policy Center, August 2023, Available at SSRN: https://ssrn.com/abstract=4537855 or http://dx.doi.org/10.2139/ssrn.4537855

Jana Hrdinova (Contact Author)

Ohio State University (OSU) - Michael E. Moritz College of Law

55 West 12th Avenue
Columbus, OH 43210
United States

Dexter Ridgway

Ohio State University (OSU) ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

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