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Estimated revenue from marijuana legalization increases to $58 million

  • Members of the Commission To Study The Legalization, Regulation, And Taxation Of Marijuana meet for one of the last times in Concord as they prepare a report with a possible blueprint for legalization, Sept. 24, 2018.

  • In this Feb. 17, 2016 photo, plants grow at the home of Jeremy Nickle, in his backyard in Honolulu, Hawaii. Nickel, who owns Hawaiian Holy Smokes and is applying for a dispensary, grows a variety of strains and has a medical marijuana card. Those wanting to open medical marijuana dispensaries in Hawaii face unique obstacles in a state of islands separated by federal waters. (AP Photo/Marina Riker)

Concord Monitor
Published: 9/26/2018 10:28:36 AM
Modified: 9/26/2018 10:29:08 AM

Concord — Legalizing marijuana could secure New Hampshire as much as $58 million a year, according to a Department of Revenue Administration analysis this week — the highest estimate yet.

But whether the Granite State actually would receive that much depends on a range of factors, including how high the tax is set in the first place.

If the state chose to tax cannabis at 15 percent, the revenue could veer from $26.7 million to $57.8 million a year, according to Melissa Rollins, a senior financial analyst at the department.

If the tax were lower — 7 percent — the yearly revenue could dip to between $15.3 million to $32.8 million, Rollins added.

Those estimates hang on a slew of uncertain variables, including how many people in the state use the drug, how many ounces a year the average user buys, what prices the licensed dispensaries charge, and how many Granite Staters stick to black market purchases — or venture out of state, Rollins said. Determining any of that definitively is near impossible, she added.

But the department’s study, which was modeled off a recent comprehensive study in New York provides higher revenue estimates than before. As recently as December, the high estimate for New Hampshire under a 15 percent tax proposal was $41.6 million.

Rollins said this month’s numbers are higher because the New York study provides a clearer sense of usage rate and prices on which to model New Hampshire’s study.

The department’s analysis was provided to the state’s Commission to Study the Legalization, Regulation, and Taxation of Marijuana as it races to complete a report by November outlining a potential path to legalization.

For Rep. Pat Abrami, R- Stratham, the commission’s chairman, the key question is not whether legalization would generate revenue but whether it would generate enough. As part of the commission’s draft proposal, revenue from the tax must cover the cost of licensing and enforcing the dispensaries before it can head to the state’s general fund.

But Abrami said the new analysis indicates legalization would be more than sufficient.

“It gives us a sense of: Are we going to generate enough revenue to cover the cost of regulating?” he said after a commission meeting on Monday. “And the answer, I think, is going to be yes.”

The commission, which has been meeting regularly since last year, includes a broad cross-section of representatives, including legislators, medical groups, law enforcement and anti-marijuana advocacy organizations.

But despite entrenched disagreements, the group is moving toward agreeing on a framework that could be used should legislators decide to pass legalization next year, members said.

A draft report proposes the creation of a commission to oversee any legalization effort, modeled after the state’s Liquor and Lottery commissions. Three commissioners — representing enforcement, licensing and research — would be overseen by an executive director; each would oversee their own staff, the draft proposal suggests.

Prospective dispensaries, meanwhile, would face $10,000 to $15,000 licensing fees and a range of additional restrictions.

The proposed law would cap possession of loose marijuana at one ounce, and concentrated marijuana at six grams.

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