As November approaches and states across the country look towards voter referendums on cannabis legalization, several forward-thinking cannabis proponents are beginning to envision a post-legalization world. According to a statement released by Vicente Sederberg LLP, a top-ranked national cannabis law and policy firm with offices in Austin, Boston, Denver, Jacksonville, Los Angeles, and New York, legalization could result in more than half a billion dollars per year in new tax revenue for Texas. Attorneys at the firm noted in an economic analysis released Monday that legal, regulated cannabis would create upwards of 40,000 new jobs for the Lone Star state.
Most importantly, Texas would save millions by not arresting people for cannabis infractions. As the statement from Vicente Sederberg LLP noted, millions of taxpayer dollars would be saved on criminal justice costs.
"States across the country are seeing the benefits of legalizing and regulating cannabis," said Shawn Hauser in a statement. Hauser is a partner at Vicente Sederberg, who heads the firm's Austin office.
He continued: "It is inspiring lawmakers in prohibition states to reexamine the efficacy and costs of their current policies and take a closer look at the alternatives. The goal of this report is to provide a snapshot of the economic benefits Texas would experience if it started treating cannabis more like alcohol for adults 21 years of age and older."
According to the press release, the report had several key findings, including the fact that “there are more than 1.5 million adults 21 years of age and older in Texas who consume cannabis on a monthly basis. If the state regulated cannabis for adult use, it would see an estimated $2.7 billion per year in cannabis sales.”
Moreover, the report noted that If Texas could generate over $1.1 billion “per biennium” in new state revenue should the state approve a similar regulatory system as Colorado. An additional $10 million could be raised annually if Texas adopts what the report deems “a modest business license fee.” That fee would greatly help to reduce any costs associated with setting up a legal cannabis program.
New businesses would thrive in the Lone Star state as well. According to the report, “a regulated adult-use cannabis market in Texas would result in hundreds of new businesses, creating an estimated 20,000-40,000 direct jobs in the cannabis industry, as well as tens of thousands of indirect and induced jobs.”
Legalized cannabis would save money in the court system as well. Instead of wasting time and money on prosecutions, Texas could save an estimated $311 million per year.
"A regulated cannabis market would be an economic boon for the Lonestar State," Hauser said in a statement. "Hundreds of millions of dollars in new tax revenue and tens of thousands of new jobs would be especially helpful in overcoming the losses stemming from the COVID-19 pandemic. Texas is leaving an enormous amount of money on the table by keeping cannabis illegal."
Dwight Clark, a senior policy analyst at Vicente Sederberg who previously worked in the Texas Legislature, said that “the stakes are high,” mostly because of the size of the state’s population.
"There are well over a million adults in the state who regularly consume cannabis, so enforcement costs are substantial, to say the least," Clark said in a statement. "If cannabis were regulated, the revenue from license fees and taxes would easily cover the costs of administrating the system and enforcing regulations. Criminal justice resources could then be redirected toward other, more pressing matters. Plus there would be significant revenue left over that could be used to fund other programs and services."
Andrew Livingston, director of economics and research at Vicente Sederberg, authored the aforementioned report on cannabis in Texas, with help from policy consulting affiliate, VS Strategies.