Delaware State Auditor Kathy McGuiness released a report that estimates Delaware could realize more than $43 million in annual tax revenue from the regulation and taxation of legal marijuana.
In the report entitled “Millions in Revenue Anticipated from Legalizing Marijuana in Delaware,” McGuiness said that regulating the sale of marijuana for adult use would also allow for new business formation and the creation of more than 1,000 new jobs over five years.
“Forty-three million dollars in state tax revenue would be a boon to Delaware’s coffers,” McGuiness said. “That money could be used to plug budget holes in the short term and would continue to provide revenue for all kinds of important initiatives in the long term.”
The special report uses publicly available data to determine that legalizing marijuana use for adults 21 and older would create a $215 million industry in the state. It assumes a reasonable 20 percent excise tax to reach the $43 million figure.
The report also examines other states’ current or proposed regulatory frameworks for taxing the cultivation and sale of recreational marijuana.
“With neighboring states either legalizing it or considering doing so, taking action now is the only way to prevent Delaware from being at a competitive disadvantage in the future,” McGuiness said. “The First State cannot and should not be the last state to approve legalization in the region.”
Legalization faces barriers that include opposition from the the state medical society and AAA Mid-Atlantic. If Delaware had direct voting via referendum, legalization might already be a reality, with the majority of residents favoring legalization. The only adjoining state to legalize marijuana was New Jersey.
Opponents of legalization have cited issues related to driving overall health and have claimed that tax revenues would be less than estimated or might be offset with higher rates of traffic accidents and opioid use.
The jury remains out on whether legalization increases or decreases opioid use. Delaware has one of the nation’s highest rates of opioid use and related deaths.
The new special report can be located on the Auditor’s Office website foundhere